Wikipedia Definition

The current definition in Wikipedia is the following:  In the United Kingdom, Pension liberation is a term used by confidence tricksters that purports to allow individuals to access the funds within pension before the age of 55 when permission has not been provided by HM Revenue and Customs (HMRC).

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Victims are told they can liberate their pension before they are 55 years old without having to pay 55% tax on whatever they withdraw. Pension liberation itself is not fraud (although it is unwise and expensive); however, it is fraudulent for an adviser (or introducer) to promise that this will be tax free. Because it isn’t.

Liberation takes many forms and is often called a “loan”. The perpetrators claim there is “no connection between the pension transfer and the loan”. Whatever clever promises these scammers make – even in writing – that the “loans” are not taxable, this will make no difference to HMRC.

They have seen many different way of attempting to disguise the liberations, and quite frankly they don’t care how it is done or what it is called. If a pension is transferred and the victim is under 55 and ends up with cash as a result, he will also end up with a tax bill.

Pension Liberation and the Government


Since the introduction of “Pensions Freedoms” in April 2015, people can take 100% of their pensions in cash once they reach 55. The first 25% is tax free, and the rest is taxable at the marginal (normal) rate. But anything taken out of a pension before the age of 55 is still classed as an “unauthorised payment” and will be taxed at the penal rate.

Many of the Class Action members were promised, by a government consultant on pensions, that their liberations (or loans) were tax free. This makes no difference to HMRC and they still issue tax demands to all the victims.