Pensions scams and liberation

What is pension liberation?

Section 18 of the Pensions Act 2004 (PeA 2004) provides the statutory definition of ‘pension liberation’. It applies to:

1. •

   both personal and occupational pension arrangements, and

2. •

   money that has been taken from a pension scheme, whether directly or indirectly

This money is then used in a way which is not authorised by pensions legislation and/or regulation. In certain cases, this involves tax evasion and/or fraud.

The creation of devices, schemes or arrangements to circumvent the rules relating to pension schemes has been an ongoing issue for the regulatory bodies which oversee pensions in the UK for many years. Pension liberation usually starts with a transfer from one pension vehicle into another pension vehicle. This transfer is usually instigated by an adviser or ‘introducer’ giving a promise of early access to pension savings (ie before normal minimum pension age), or a cash incentive or a pension loan.

In a number of cases, the incentives promised, or the information provided to pension savers, is misleading. In some of those cases, the