Company chief executive Nigel Green said people should be very wary of schemes offering to “unlock” up to 50% of an individual’s pension.
Green said: “We have long been warning against these ‘pension-busting’ schemes which offer investors the possibility of taking enormous, tax-free sums before retirement.
“The charges on unauthorised payments can easily escalate to a shocking 70%, meaning there will be very little, if anything, left in your pension pot when you come to retire. Investors should steer clear of schemes which promote withdrawing vast sums of capital out of their pensions before they reach the age of 55.”
In the past, HMRC has moved to close down pension schemes which it feels are offering benefits not permitted under UK pension rules.
This includes a number of Qualifying Recognised Overseas Pensions Schemes, such as the ROSIIP scheme in Singapore which HMRC argue was not established correctly. There has never been a suggestion that the ROSIIP scheme paid any undue benefits to its members, but HMRC is currently pursuing a 55% tax penalty against the members – a charge which is being contest in the High Court.
