Government Blamed For Emergence of ‘Highly Questionable’ Pension Liberation Schemes

The government has been blamed for the rise of highly questionable pension  schemes which have led to a £2 billion ‘liberation scandal’.

A nationwide campaign group  says the government is “ultimately responsible” for the potential loss of billions of pounds of savers’ pensions by refusing to “fix a broken system” that is pushing victims to the brink of suicide.  Since April the over-55s have had the freedom to cash in their retirement pots.  Whilst 25 per cent will be free of tax in every withdrawal, the rest is subject to income tax at the person’s highest marginal tax rate.

But highly questionable pension liberation schemes, such as Ark, Evergreen and Capita Oak have sprung up since the landmark decision offering a tax-free way to liberate your pension. The scam has cost members of ACA Pension Life, set up to rescue victims of pension liberation scams, more than £20 million across 13 schemes with total losses in excess of £2 billion.

Angela Brooks, Chairman of ACA Pension Life,  says: “The 800-plus members transferred into 13 different schemes that sunk their pension pots in high-risk ventures in order to ‘liberate’ their funds in a supposedly tax-free way.

“Cumulatively, these people, many of whom were already financially strapped which is why they were able to be conned into liberating their pensions in the first place, have potentially lost retirement funds worth a staggering £2bn.

“Not only are they uncertain whether their hard-earned life savings will ever be even partially recovered, they are now also facing ruinous debts and crippling tax bills.”

The fraudsters assure pensioners they can offer tax-free access to their pensions due to a legal loophole. However, this is not the case and HMRC are in the process of issuing tax demands of 55 per cent.

Brooks adds: “The triple-whammy stress of being conned out of their life savings, having huge debts and being liable for astronomical tax charges is, understandably, having a huge toll on these victims.  The stress has caused at least four suicides, the breakdown of dozens of marriages and scores of people being signed off work.

“The 800-plus members of ACA Pension Life are just the tip of the iceberg.  There are many thousands more people who have been ripped off by scammers busting their UK pensions.

“Indeed, it is my experience that this is a growing problem due to the so-called pension freedoms that were introduced by the government earlier this year.”

Brooks believes the government is “ultimately responsible” for the fraud because HMRC, the Pensions Regulator (tPR) and the Financial Conduct Authority (FCA) are failing in their duties by allowing this scandal to run and run.