Consumers are being warned against "predators" who entice them to cash in their pension fund before retirement.
Pension liberation schemes encourage people to access their pension savings before the age of 55. But a campaign, launched on Thursday, highlights the high tax charges and fees that can erode the pension pot of anyone who signs up. The Pensions Regulator said up to 70% of funds can go to the tax authority, and schemes may charge high fees. This is because pension saving is tax privileged, under the proviso that the funds are not touched until the saver reaches the age of 55 at least. So, by drawing on these funds early, HM Revenue and Customs (HMRC) will take a significant chunk of the funds.....Read more here