Published by Andrew Hague on
“HMRC will tax the transferring member on incentives they receive for transferring funds, such as a cash bonus of 10% of the transfer value.”
One tactic is to encourage people to move their pension savings to a pension scheme set up by company that has no established connection to the transferring member. Pensions savings can be particularly at risk if the receiving scheme has a sole trustee: without the obvious risks of placing your pension monies in the hands a sole person you may not know, one has to wonder what would happen to the money should that sole trustee die.
Enticements are being offered to attract people but these offers will usually be traps to encourage you to switch pension savings. HMRC will tax the transferring member on incentives they receive for transferring funds, such as a cash bonus of 10% of the transfer value. Once a transfer has been made, the transaction is irreversible, and your savings can be lost in a moment.
So what should you watch out for?
Reputable firms will not use any of these practices, and if in any doubt, do not take any action but seek advice from an adviser that is authorised by the Financial Conduct Authority or call The Pensions Advisory Service.
The government’s regulatory authorities have issued information on pension scams which can be found here. Please read these before proceeding with any transfer of your pensions arrangements.
Remember, if it looks too good to be true, it usually is.