Pension scams

Pension liberation fraud

Pension liberation also known as 'pension loans' and 'pension scams', is the transfer of pension savings to an arrangement allowing you access to your funds before the age of 55.

In rare cases, such as terminal illness, it's possible to access funds before age 55 from a pension scheme. But most of the time, promises of early cash are false and likely to result in serious tax penalties.

When pension liberation becomes fraud

Pension liberation can be illegal. The victims are often misled about the fees, penalties or income tax they’ll have to pay. These hidden costs can be more than half of the value of the pension plan.

Pension liberation can mean tax charges and penalties of more than half the value of a person's pension savings, and those targeted are usually not told about this.

How you could be targeted

Companies sometimes target savers claiming they can help them take their pension cash early. This may be through websites, mass texting or cold calls. Be very cautious about giving out information in response to a text or cold call. Make sure you know who you're dealing with.

Safeguarding vulnerable adults

People can also be vulnerable if they haven't had experience of financial matters, like investments, pensions and share-dealing. Criminals often target these people and take advantage of them.

A report by The City of London Police revealed how vulnerable adults are being exploited by so called friends and family, small-time fraudsters and organised criminals, with losses from a few pounds up to millions of pounds.

Financial crime is the second most common type of abuse experienced by older people in the UK, with approximately 86,500 people aged 66 and over subject to financial abuse over a 12 month period.

Fraudsters selling fake share deals, known as boiler room fraud, land banking or operating lottery scams are increasingly targeting people with access to products like we provide at LV=.

If you know or suspect a vulnerable person is being financially abused, you should report it to police or social services.

Pension related scams

1. Investment scams are often difficult to spot as they’re designed to look like genuine investments
2. People operating investment scams use very sophisticated techniques to build trust and can convince even the most experienced investors out of their savings
3. Those most at risk are people in retirement who are actively seeking an investment opportunity
4. Pension changes for April 2015 have increased the population of potential targets
5. Fraudsters are targeting people as you can now access your whole pension fund (minus tax charges) as opposed to a tax free sum limited to 25% plus a regular income.