Pensions firms are calling for a list of registered pension providers in the UK so insurers can crack down on pension liberation scammers operating outside of the law.
There has been an alarming rise in the number of dodgy firms offering to unlock a person's pension before they are legally entitled to it at the age of 55, which incurs a massive tax charge on top of the sky-high fees charged by the liberators, the Daily Mail reports.
Some are simply operating in grey areas at the limit of the pensions law, but many going beyond this pose as legitimate pension providers by registering themselves as occupational pension schemes with HM Revenue and Customs and The Pensions Regulator.
But Neil MacGillivray, of the pension provider the James Hay Partnership, said he has noticed more instances where liberators are setting up professional looking dummy companies that aren't on the register.
He has argued that HMRC should provide access to the register so pension companies can root out such firms when considering transfer requests from their customers.
He said: 'There is no central register that we and other pension scheme providers can have access to and that's a big weakness.
'Some of these are organised outfits operating call centres and offices, and when we request for information on their scheme rules they are able to provide information.
'We get requests for transfers and have to decide whether a scheme is suspect or not, and having access to a register could certainly help in that process when it comes to those liberators who have not registered as a pension scheme.
'If we look at a register and see they're not on there, we would simply not transfer.'
The James Hay Partnership, like almost all pension providers, has witnessed the proliferation of pension liberation schemes in recent years.
The UK's major insurers have blocked more than £60m worth of pension transfers over the last year to suspect pension schemes.
Taking pension cash before the age of 55 can decimate a person's retirement savings, as liberators can typically charge 30% to unlock the cash while HMRC will impose a tax charge of 55% on the total amount liberated, leaving a person with a paltry return from their savings.
Many of these liberators are committing fraud by failing to inform pension holders that accessing their cash early comes with such a large tax charge.
HMRC is attempting to tackle the problem and is expected to de-register up to 500 pension schemes suspected of being involved in liberation.
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