Pension Liberation

Is Pension Liberation a bad idea?

It’s not just us that think this is a bad idea, The Pensions Regulator, the FCA and HM Revenue and Customs have all issued warnings about Pension Liberation of schemes.

They go on to say that there is a high risk that by going ahead with one of these scams could result in you losing your entire pension fund and in addition to that loss, HMRC could implement penalties, charges and tax payments that have to be paid by you.

The Pension Liberation scammers are offering individuals under the age of 55 the ability to access their pensions early, but they typically offer 50% of the value of your pension fund as a cash payment.

Going into one of these types of schemes is dangerous on so many levels. Forget the legality about what’s being offered for a minute and simply look at the charges being applied, including the advisers commission, along with the types of potentially risky investments used for any residual funds left over after cash has been paid out.

The costs can be extremely high. In many cases you would find borrowing the money elsewhere would make more financial sense, although a lot of the companies advising on these types of schemes are preying on the fact you can’t borrow the money elsewhere very easily and these arrangements seem simple and easy. The point being that it depends on your circumstances and why you’re trying to release your pension early in the first place. Any reputable company would ask you a lot of relevant questions to ensure due diligence.

Companies offering these types of schemes are likely to tell you they are exploiting a loop hole that allows you to transfer your pension fund abroad and then release funds. They may well be exploiting a loop hole; however, they may not be telling you that you are obliged to inform HM Revenue and Customs about your cash payment. The reason they don’t tell you is because you will probably be hit with a significant tax charge because your payment is considered to be unauthorised. If HMRC have had to contact you before you tried contacting them, they may well include penalties and interest payments in addition to the tax.

Ignorance of the law is no defence.

Don’t confuse Pension Liberation with Pension Release.

Pension Liberation scams often target people under 55. The regulations in the UK are very clear, you are only able to access your pension if your are aged of 55 or over and in most cases you are unlikely to be able to release more than 25% as a cash payment, although there are some old employer pension arrangements that are an exception to this rule.

Pension Release and pension Unlocking are a legitimate option to consider but only if you are aged 55 or over. And given the fact any company advising on this should be regulated by the FCA, a very stringent process must be followed in order to ensure the correct advice is given because releasing a pension early is only suitable for a very limited number of people and circumstances.

These arrangements are entirely legitimate and fall within UK Tax Law.

They typically apply to anyone aged 55 and over but haven’t reached retirement age. They allow such individuals to release a tax free cash lump sum and either take an immediate income as well, or in most cases defer taking that income until some date in the future, usually when they retire.

However; just because individuals aged 55 or over have the legal right to access their pensions early, this doesn’t automatically mean it is a good idea. There are still a number of risks that need to be taken into consideration before making a final decision.

Understandably The FCA warns that these types of arrangements are only suitable for a limited number of people. This is because you are likely to end up with a smaller pension at retirement as a result, so you need to make sure that releasing a pension early is the right option for you.

The FCA are NOT saying that people aged over 55 should never release their pensions early; they are simply pointing out that it shouldn’t been regarded as an easy option for raising cash and therefore it is always advisable to seek professional help.

Need Advice?

So why not Get Started today to receive your free pension guide. If you read the guide and would like us to look into your pension options, then simply complete the Enquiry Form at the back of the guide telling us what pensions you would like us to look into and post it back to us via FREEPOST.

You are under no obligation to go ahead with any of our recommendations if you don’t want to.



Get started today and receive expert advice from Grove Pension Solutions

Initial consultation free


Grove made all aspects of the pension release process very clear and precise, and kept me up to date on what stage my pension unlocking was at. Very professional at all times.

Mrs MR, Glasgow

I found Grove Financial Services to be an efficient and helpful company who I believe will do the best for their clients.

Mr CN, Slough

Very helpful. Explained in detail, answered all my questions. Would recommend to family and friends. Excellent services.

Mr SS, Cheltenham

I found the service very good, everything was explained in simple English, which made it easy to understand. The advisor was polite and very helpful.

Mrs SB, Selby

Found your service to be very professional. Your staff were polite and friendly ready to explain / clarify any query I had relating to release of my pension fund(s). Even went the 'extra mile' to update me via phone and text.

Miss RA, Kent

This was the best decision I have made. I cannot express how helpful Grove Pension Solutions were. They go the extra mile to ensure you receive the best service. Their staff are very knowledgeable, professional and friendly, not something other companies offer these days.

Ms JM, Glasgow

I was in a situation and found that Grove Pension Release came to my rescue and appreciate everything they did for me.

Mr GGB, Chicester

Pensions are an incredibly difficult subject to grasp but the team at Grove Pension Solutions went out of their way to explain, in plain English, the pro's and con's with regards to the pensions even if it meant that they wouldn't get as much business. They really did put the client first which is a refreshing change to the financial culture of today. I was very happy with the service and satisfied that my pensions are in safe hands.

Ms D M, Nottingham

After wasting so much time on sites belonging to "big players ". I selected an unfamiliar one belonging to Grove Financial and never looked back - excellent service and commitment.

Mr TJ, Surrey


Grove actively support the following charities and institutions

Bromley Mencap