Combatting pension liberation
HMRC has been working to combat pension savers being targeted by unscrupulous companies encouraging them to access their pension savings early. This is commonly known as pension liberation and can have significant, adverse tax consequences.
In October 2013, new rules were introduced to strengthen existing processes that deal with pension scheme registrations and transfer requests in order to deter pension liberation and safeguard pension savings. HMRC has also been working with other government departments/agencies and the pensions industry to take action to prevent pension scams and preserve pension savings.
Earlier this month, a revised set of leaflets highlighting the serious downsides of pension scams was published in conjunction with The Pensions Regulator. The leaflets provide guidance on what trustees and scheme members can do to reduce the risk of becoming involved in these scams, and the tax impact of releasing pension funds early using these types of arrangements.