The group, which aims to rescue victims of pension liberation scams, announced earlier this month that it has dealt with pension scheme members who have lost more than £20m across 13 schemes, with total losses in excess of £2bn.
Angela Brooks, chairman of ACA Pension Life, said: “The 800-plus members transferred into 13 different schemes that sunk their pension pots in high-risk ventures in order to ‘liberate’ their funds in a supposedly tax-free way.
Her group represents scheme members in class actions, who have transferred their funds into suspected pension liberation schemes.
FTAdviser asked Ms Brooks for a break down of the £2bn, which she said was invested in six pension schemes which came to the value of £1.39bn altogether, with the remaining value invested in other investment vehicles.
“Cumulatively, these people, many of whom were already financially strapped, which is why they were able to be conned into liberating their pensions in the first place, have potentially lost retirement funds worth a staggering £2bn.
“Not only are they uncertain whether their hard-earned life savings will ever be even partially recovered, they are now also facing ruinous debts and crippling tax bills.”
Ms Brooks described the liberators as “slick, professional fraudsters”, who assured people they could access their pensions tax-free due to a legal loophole.
She added that HM Revenue and Customs are in the process of issuing tax demands of 55 per cent to many of those affected. “The triple-whammy stress of being conned out of their life savings, having huge debts and being liable for astronomical tax charges is, understandably, having a huge toll on these victims.
Ms Brooks added that in her experience, the problem of liberation had been growing since the pension freedoms were introduced by the government earlier this year.
Therefore, ACA Pension Life is calling for the government to set up an independent, specialist task force to tackle this problem.
“Even if a scheme is closed, the same fraudsters simply set up another one to con more savers out of millions,” she pointed out.
“The government says it is ‘monitoring’ the situation regarding pension liberation scams. Apart from the fact that watching innocent victims’ lives being destroyed is most certainly not a spectator sport, it is the responsibility of the government to fix what is a broken system - and be seen to do so publicly.
“The government is ultimately responsible as its agencies – namely HMRC, The Pensions Regulator and the Financial Conduct Authority – are failing in their duties by allowing this scandal to run and run.”
Tom McPhail, head of retirement policy at Hargreaves Lansdown, agreed that the government could do more to protect people from these scams and they need to make a more robust distinction between regulated and unregulated investment schemes.
He pointed out that the government also need to make it much harder for regulated advisers to put people into unregulated investment schemes.
“It is probably stretching matters, however, to lay the £2bn worth of losses at the government’s door,” Mr McPhail added.
Daren O’Brien, director at Aurora Financial Solutions, said: “These fraudsters have impacted on honest, professional IFA’s who are then used by the government to pick up the compensation bills and is compounded by being left with a bad name due to the fraudsters.”
ruth.gillbe@ft.com
