View more on these topics

Opra renews fight against cash scams

The Occupational Pensions Regulatory Authority has stepped up its campaign to warn consumers against pension liberation scams.

Opra has updated its guides to members and trustees to highlight the dangers that pension liberation poses for consumers looking for a means to free up cash from their pension schemes quickly.

Pension liberation or “trust busting” is obtaining a cash sum for pension benefits following a transfer contrary to Inland Revenue requirements. Opra is warning pension scheme members who are below the usual earliest retirement age of 50 not to be tempted to transfer their pensions to schemes run by people offering to release the cash.

It says members can end up losing all their pension rights as well as much of the transferred cash lump sum through commission and income tax.

Opra warns pension scheme trustees, managers and administrators to ensure they have the appropriate controls in place to prevent transfers to liberation schemes.

It also highlights common features of bogus schemes to watch out for. It says liberation schemes will often be newly established, the transfer documentation sent out may not look professional or will be difficult to understand and the schemes may require payment by cheque to ensure account details are kept secret.

Although many liberation schemes have received formal approval from Inland Revenue Savings, Pensions, Share Schemes, which is required to operate as an occupational scheme, some use fake numbers. Other schemes use reference numbers borrowed from defunct pension schemes.

Pension liberation is different from pension unlocking, where an adviser can arrange the immediate purchase of an annuity for an occupational scheme member aged 50 or over, usually following a transfer into an individual pension arrangement. This is a legitimate practice providing the legal and Inland Revenue requirements are met.

Origen pensions director Michelle Cracknell says: “I am not surprised that Opra has reissued a warning now as a spate of these schemes star-ted up recently. The difference is members are now being targeted individually.”

Recommended

Asking prices falling as more properties stay on the market

The average asking price for a house in the UK fell by 2 per cent in the past month, according to data from market analyst Rightmove. The company says the fall is likely to have been caused by the series of int-erest rate rises. The average property price fell from £196,198 on July 10 to […]

Stakeholder proposition has stalled

I am amused by the story that actuaries have their sums wrong over stakeholder (Money Marketing, August 19). Yes, of course they have, but as things stand at the moment, no matter how high the annual management charge, this will always be the case. By removing front-end loads and surrender penalties, it is like a […]

Clerical Medical – Income Fund

Type: Oeic Aim: Income and growth by investing in corporate bonds and cash Minimum investment: Lump sum £10,000, monthly £400, Isa lump sum £3,000, monthly £200 Investment split: 97% corporate bonds, 3% cash Isa link: Yes Pep transfers: Yes Charges: Initial 4%, annual 1% Commission: Initial 3%, 0.5% renewal, Isa/Pep transfers initial 0.5%, renewal 0.5% […]

More charity, vicar?

Solihull IFA Adrian Smith & Partners is calling on the Government to give tax relief to charities on company donations. Registered charities can claim back tax on individual donations made under the Gift Aid scheme and AS&P believes the same concession should be made on company donations as well. The IFA recently celebrated its fifth […]

How to use wills to protect your clients’ wishes

March was Free Wills Month! Free Wills Month brings together a group of well-respected charities to offer members of the public aged 55 and over the opportunity to have their simple wills written or updated free of charge by using participating solicitors in selected locations around England and Wales. Research by the Law Society* highlighted that only 64 […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com