The Telegraph reported recently that there has been a rise in the number of pension liberation cases. If you have not come across these yet, there are companies that make it their job to contact people out of the blue claiming to be able to provide them with early access to their pension.

In the majority of cases, what they are doing is offering the pension plan owner the chance to access some of their money early. Some schemes even offer a ‘cashback’ incentive.

The cashback incentive is particularly illegal. Of course these companies are not paying you cashback from the goodness of their hearts. They firstly make money by taking commission from your pension. Then, because they are taking so much commission, they offer to pay you some of it. So what they are really doing is giving you your money back. That’s not really cashback.

The big problem is that it is known as an unauthorised payment. It is against the rules that HMRC play by and they will come and fine you for doing it. In fact, accessing your money from your Pension before the age of 55 is against HMRC rules and they will fine you for doing it.

There are a lot of questionable companies out there so if you ever come across something that sounds like it is too good to be true, regardless of how much you want it to be true, please think carefully or get advice before you act.

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Blog by Jaskarn Pawar

Jaskarn Pawar is an experienced and award winning Chartered and Certified Financial Planner. He advises people all over the UK on financial planning and wealth management issues to help them reach solutions to fit their personal needs. You can contact Jaskarn on 01604 211234 or by e-mail on