:00:00. > :00:00.Tonight, the pension scam that's ruining retirement.
:00:07. > :00:10.It?s cost victims more than half a billion pounds in savings ? now
:00:11. > :00:17.There are numerous people who have said to me that they
:00:18. > :00:21.sometimes feel the only way out of this misery is to commit suhcide.
:00:22. > :00:24.Also tonight, our survey shows why so manx of us
:00:25. > :00:29.Saving up for a pension, putting money aside each month,
:00:30. > :00:35.And the pensioners defying the stereotypes.
:00:36. > :00:45.People retire and die. The stories that matter, closer to home.
:00:46. > :00:56.This is Inside Out for the East Midlands.
:00:57. > :00:59.We're all being encouraged to save for our retirement.
:01:00. > :01:04.And with all that money sitting in a pension pot, you may bd tempted
:01:05. > :01:10.Pension liberation companies target people with offers to release that
:01:11. > :01:19.cash but they don't mention the huge tax implications
:01:20. > :01:22.Tonight, Inside Out goes undercover to expose
:01:23. > :01:25.the pension scam companies promising financial security but leavhng
:01:26. > :01:36.When we take out a pension, it's all about securing our future,
:01:37. > :01:47.But what happens if I want to cash mine in before I'm 55?
:01:48. > :01:50.According to some companies, age is no barrier.
:01:51. > :01:56.In fact, that's what they c`ll it, pension liberation.
:01:57. > :02:00.When John ` not his real nale ` from Derbyshire needed to free up some
:02:01. > :02:08.It was an attractive scheme as a way of releasing some mondy from
:02:09. > :02:13.your pension fund amassed over the years and they were straightforward,
:02:14. > :02:17.it was a case of you obtain your pension fund in the long`term which
:02:18. > :02:20.you can use at retirement, but you can enjoy some of the cash
:02:21. > :02:27.The scheme would have freed up ?26,000 in cash but
:02:28. > :02:30.after he transferred his pension, the regulator and then the
:02:31. > :02:39.That meant the pension was null and void and whatever assets I had
:02:40. > :02:46.That means my pension pot has now gone.
:02:47. > :02:52.The great thing about pensions is that they are tax efficient `
:02:53. > :02:56.in other words, we get tax relief on them to encourage us to save
:02:57. > :03:04.And if you try to cash yours in before you're 55, cutting those
:03:05. > :03:20.You would have to pay up to 70% of what you get back in tax.
:03:21. > :03:30.You actually cannot take anxthing from your pension until age 55.
:03:31. > :03:42.But John didn't. Now he owes the taxman thousands of pounds.
:03:43. > :03:47.What it means for me person`lly is potential bankruptcy and loss
:03:48. > :03:54.Many of the people here had joined the same scheme.
:03:55. > :03:57.Some, as they've told me, face financial ruin.
:03:58. > :04:01.It is why they formed this support group.
:04:02. > :04:04.The people who are selling the schemes were very craftx,
:04:05. > :04:09.very clever, very slick, very convincing, and they believdd them.
:04:10. > :04:19.Numerous people have said to me they sometimes feel the only way out
:04:20. > :04:27.of this misery is to commit suicide because there is no escape.
:04:28. > :04:29.For those of us stuck in a financial hole, freeing up
:04:30. > :04:33.our pension pot might seem like the light at the end of the tunnel, but
:04:34. > :04:37.the people I've met so far say they were kept in the dark about tax
:04:38. > :04:39.That is why I am doing my own research.
:04:40. > :04:42.I want to find out if companies are really telling
:04:43. > :04:49.I can cash my pension in early and not pay tax.
:04:50. > :04:54.So we'll start with the initial pension, ?37,600.
:04:55. > :04:57.This company will take away certain fees.
:04:58. > :05:05.You are left with ?25,132, which is 68% of your pension.
:05:06. > :05:09.But what it doesn't tell yot is that HMRC are going to also take a
:05:10. > :05:17.further 55% at minimum, which leaves you with about 10% of your pension.
:05:18. > :05:20.That's a frightening thought, but are companies setting out to mislead
:05:21. > :05:36.I hope a few calls will help me find out.
:05:37. > :05:38.We've chosen a selection of companies at random and
:05:39. > :05:41.I've asked pensions expert Richard Jacobs to listen in.
:05:42. > :05:45.I'm pretending to be 48, so if I did cash in my penshon,
:05:46. > :05:50.You can't take money out of a pension before the age of 5.
:05:51. > :05:54.So the first company knows the rules, so maybe I won't be lisled.
:05:55. > :05:57.Operation Scorpion might have something to do with that.
:05:58. > :06:00.It's what the police and pension regulators are calling
:06:01. > :06:05.their crackdown on pension liberation companies.
:06:06. > :06:07.Since being set up, it's investigated a sector worth
:06:08. > :06:14.We have been making a few more calls.
:06:15. > :06:17.I want to know what Richard thinks of them.
:06:18. > :06:23.I would like you to try and pick out the wrongdoings.
:06:24. > :06:30.We have made it clear I am under 55 and need cash fast.
:06:31. > :06:35.The monies are 28% of the v`lue of your transfer and those monhes are
:06:36. > :06:58.A scam. Whoever that business is, if money is coming out,
:06:59. > :07:02.it has to come from somewhere, there is no money magicked from anywhere.
:07:03. > :07:08.That is pension liberation, whatever name people give it.
:07:09. > :07:13.But he knows I'm under 55, so I will have to pay tax, right?
:07:14. > :07:16.No, because the money isn't coming out of the pension ftnd.
:07:17. > :07:19.No tax liabilities for taking your pension out early?
:07:20. > :07:29.He is going to lose his pension in that case, he will lose his pension.
:07:30. > :07:39.There is no tax liability whatsoever.
:07:40. > :07:45.Of nine companies we contacted online or on the phone, four
:07:46. > :07:52.That's left me feeling as mhserable as the weather, so what is the
:07:53. > :08:01.We have raised awareness with the police and crime commission
:08:02. > :08:03.The important thing is to r`ise awareness with consumers.
:08:04. > :08:10.I think it would be a zero sum game if we tried to shut
:08:11. > :08:13.down any website, so the message we need to gdt out is
:08:14. > :08:16.that if anyone comes to you and offers you access to your pdnsion
:08:17. > :08:20.scheme before 55, they are telling a lie. You need to back awax fast.
:08:21. > :08:23.And don't the victims and their advisers know it.
:08:24. > :08:29.I am playing them something they need to hear.
:08:30. > :08:31.The monies are 28% of the v`lue of your transfer
:08:32. > :08:35.and those monies are paid b`ck to you through another channel.
:08:36. > :08:51.That is shocking and the poor consumer doesn't know, is stffering.
:08:52. > :08:53.I couldn't believe what I lhstened to there,
:08:54. > :09:01.But if people are still being misled, why are the victims paying?
:09:02. > :09:04.I'm hoping Ruth Owen can answer that.
:09:05. > :09:08.She is Revenue and Customs director`general of personal tax.
:09:09. > :09:11.There are innocent people hdre being stung left right and centre.
:09:12. > :09:15.Are you telling me people h`ve to pay this money back even
:09:16. > :09:22.If there is tax due, HMRC has to apply it.
:09:23. > :09:26.That is the rules of the tax system so if you have
:09:27. > :09:29.accessed money from your pension pot that breaks the tax rules, we have
:09:30. > :09:34.to charge you tax because you got tax relief you were not eligible to
:09:35. > :09:42.What is there to protect thd consumer, to protect the pension?
:09:43. > :09:46.I have seen many cases, tragic circumstances where people
:09:47. > :09:48.have been misled and lost their entire retirement savhngs
:09:49. > :09:56.Some are real innocent victhms in these situations but frol a tax
:09:57. > :10:00.point of view, we have to apply the rule equally and fairly and if
:10:01. > :10:03.you have chosen to take your pension out of the safety of a retirement
:10:04. > :10:36.A lesson the victims are learning the hard way.
:10:37. > :10:39.Run as far away as you can from them in the opposite directhon.
:10:40. > :10:41.Operation Scorpion is helping to raise awareness,
:10:42. > :10:44.There is no tax liability whatsoever.
:10:45. > :10:55.Well, when you hear about those last experiences, it may
:10:56. > :10:58.come as no surprise to find out that around a third of British adults
:10:59. > :11:02.We commissioned polling company ComRes to do a survey,
:11:03. > :11:04.and the most common reason for not having one was cash.
:11:05. > :11:07.People say they either can?t afford it, think they?re too young
:11:08. > :11:09.to start saving, or they just don?t trust pension companids.
:11:10. > :11:12.Which might be why one in five are investing in property or
:11:13. > :11:15.John Cuthill went on a pensioners' day out to
:11:16. > :11:19.These days, most of Britain's workers don?t have a pension sorted,
:11:20. > :11:22.which could leave us relying entirely on the state or, lhke our
:11:23. > :11:27.65`year`old bus and its 70`xear`old driver Mervyn, still working.
:11:28. > :11:31.I enjoy it and it's a part of a business.
:11:32. > :11:33.It's a nice job, you meet nice people,
:11:34. > :11:42.I did invest in a pension but it went down the pan.
:11:43. > :11:50.And where better to meet th`n the Pensioners Pub?
:11:51. > :11:52.Half of our passengers on our 1949 Bedford are rethred
:11:53. > :11:55.The other half are pension refuseniks ? a handful of Britain's
:11:56. > :12:00.13 million company employees who don?t have a private pension.
:12:01. > :12:03.The government's rolling out a scheme to try to put that right.
:12:04. > :12:10.Auto`enrolment makes it a legal requirement for companies to
:12:11. > :12:17.But if you earn less than ?00,0 0, you won't qualify.
:12:18. > :12:20.And anyone self`employed will have to sort themselves out.
:12:21. > :12:24.Here's a question for you ? hands up, who has got a pension
:12:25. > :12:34.Money, really, saving up for a pension, putting monex aside
:12:35. > :12:45.I get paid ?500 a month with my training, so there is absolutely
:12:46. > :12:48.no extra funds there for pensions and things likd that.
:12:49. > :13:01.I'm Katie. I'm 26. I'm a carer. I get ?6.50 an hour.
:13:02. > :13:05.I'm still doing my studying so it?s not beneficial to md to pay
:13:06. > :13:18.Hilda's celebrating her 100th birthday today.
:13:19. > :13:21.These days you're 44 times lore likely to do the same than 60 years
:13:22. > :13:24.ago, which has prompted the government to make the most sweeping
:13:25. > :13:31.Time to make room on the bus for the Minister of State for Pdnsions,
:13:32. > :13:37.Steve Webb, the man responshble for the radical reforms.
:13:38. > :13:40.The first thing we've got to do is get millions of people
:13:41. > :13:46.Particularly starting with xoung people, then we've got to btild
:13:47. > :13:50.8% of your salary probably won't get you a comfortable retirdment.
:13:51. > :13:52.It's a start but we've got to build on that.
:13:53. > :13:56.When you get a pension, you're going to be hit by charges.
:13:57. > :14:00.In the past too many people have been ripped off with pensions.
:14:01. > :14:03.These new workplace pensions will be different because we will c`p the
:14:04. > :14:06.charges so from next April, more than 99p on the pound that xou put
:14:07. > :14:11.in will go to pension, not charges, so there will be better valte
:14:12. > :14:14.because your firm will be pttting money as well. One of
:14:15. > :14:20.With a captive audience, Stdve Webb can't resist the opportunitx to
:14:21. > :14:32.Tell me your pension experidnce are you ever going to have one?
:14:33. > :14:34.I do weddings and events, things like that.
:14:35. > :14:38.I don't think the return yot will get from a pension will be valid.
:14:39. > :14:44.Instead of a pension, he's opted for a buy to let.
:14:45. > :14:47.My property will rent out to students, it's around a high student
:14:48. > :14:50.population, and it's right hn the centre of town, so a wicked location
:14:51. > :14:56.37`year`old Balvinder Singh has frozen his private pension,
:14:57. > :15:06.put off by the constantly increasing retirement age.
:15:07. > :15:08.I don't trust pensions, because I don't know how much I m
:15:09. > :15:11.going to get and when I'm going to get that because
:15:12. > :15:15.Sometimes they say 60, 65, now they're saying 70 years.
:15:16. > :15:17.I don't know if I'm going to live that long.
:15:18. > :15:20.From listening to people, I can understand why people may want
:15:21. > :15:22.to do something in addition to pension but they should consider
:15:23. > :15:28.For people who think it is too hard, there is always something that can
:15:29. > :15:31.make it easier for them, like if they work for an employer, the
:15:32. > :15:34.employer could contribute into the pension scheme, so phone people like
:15:35. > :15:38.us at the advisory service `nd we can give little things to m`ke it
:15:39. > :15:42.helpful, but don't just relx on one source of income in retiremdnt,
:15:43. > :15:54.Things are different on the retired side of the bus, where
:15:55. > :15:58.some have the sort of gold`plated final salary schemes that anyone
:15:59. > :16:02.who's signing up to a pension now will probably never get.
:16:03. > :16:06.I don't see myself as being in any way privileged.
:16:07. > :16:10.I see myself as having workdd in a public service for a
:16:11. > :16:15.reasonable salary but the attraction of it was always the reason`ble
:16:16. > :16:25.Pension pretty good, really, because it's index linked and I know from
:16:26. > :16:29.year to year, I know exactlx what it is I'm probably going to get.
:16:30. > :16:33.I ended up with a final salary scheme,
:16:34. > :16:37.I had been with the same colpany for 30 years and was rewarded for that
:16:38. > :16:46.But not all pensioners are as fortunate.
:16:47. > :16:56.I'm 67 and I survive on a b`sic pension, which is about ?72 a week.
:16:57. > :17:00.I'm Reg, I'm 78, and my state pension is about ?640 a month,
:17:01. > :17:07.plus I have a private pension, which is about ?150 a month.
:17:08. > :17:10.Between them that's an incole of roughly ?13,000 a year.
:17:11. > :17:13.Recently ?17,000 per person or household was quoted as the amount
:17:14. > :17:23.When you're young, you don't think about 40 years hence, do yot?
:17:24. > :17:26.It sort of creeps up on you until you get to about 45,
:17:27. > :17:34.We don't take life too seriously because I think if we did,
:17:35. > :17:40.Compared to men, three times as many women retire with no private
:17:41. > :17:51.I'm Lin, I'm 58 and I run a B in Lee on the Solent.
:17:52. > :17:53.I don't have a pension in my own right.
:17:54. > :17:56.I worked all my life but I didn't think I would need one
:17:57. > :17:59.because my husband had a few pensions but unfortunately he died.
:18:00. > :18:01.Lin does get some of her late husband's Naval pension
:18:02. > :18:07.I get just below ?500 a month, which is a portion
:18:08. > :18:15.It's tough because I?ve got to work now to get
:18:16. > :18:20.But to be honest, everyone?s got to work now tntil
:18:21. > :18:30.Joan's 93 and has been retired for 30 years.
:18:31. > :18:35.She thinks there's been a ctltural shift towards spending now rather
:18:36. > :18:42.I don't think nowadays people know how to save, young people,
:18:43. > :18:47.because they've never had to save, it's a throwaway society,
:18:48. > :18:51.so they've never had to makd do and mend like we had to.
:18:52. > :18:54.As the Pensions Special rolls down the promenade, time for somd words
:18:55. > :19:00.of warning for those of us who might still have our heads in the sand.
:19:01. > :19:05.The majority of workers don't have pension savings, so anyone on that
:19:06. > :19:09.side of the bus, you are not alone, there are plenty of people out there
:19:10. > :19:15.like you, but the main mess`ge has to be, if you don?t save for your
:19:16. > :19:19.later life, what are you going to live on?
:19:20. > :19:23.The state pension, certainlx for those who are relativelx young
:19:24. > :19:28.now, is changing dramatically and from 2016 inwards, younger
:19:29. > :19:34.people will know that when they get to retirement the state pension is
:19:35. > :19:42.Now if you think you'll be happy living on ?20 a day for the rest
:19:43. > :19:45.of your life when you?ve re`ched retirement, fine, don?t do `nything
:19:46. > :19:49.but if you think you might want more than ?20 a day, to have a ddcent
:19:50. > :19:54.lifestyle, then unless you do some saving now, you won?t have `ny money
:19:55. > :20:04.So it's all about being prepared, or is it?
:20:05. > :20:16.I was planning to start sorting out my pension age 40.
:20:17. > :20:30.After today I realise that's far too late. I think my business is quite
:20:31. > :20:36.good, I'm happy with how thhngs are going.
:20:37. > :20:38.One thing's for certain though, when it comes to
:20:39. > :20:41.keeping our heads above watdr when we retire, we?re all going to have
:20:42. > :20:48.to plan ahead. Next time I'll bring my swimmers.
:20:49. > :20:51.Ready or not, retirement has certainly ch`nged.
:20:52. > :20:54.As we've just seen, when it comes to leading
:20:55. > :20:56.an active life, some over`64s put the youngsters to shame, and
:20:57. > :21:02.Al Needham has been meeting some hardy souls who've vowdd
:21:03. > :21:23.Back in my grandfather's tile, your life was laid out for you. Xou leave
:21:24. > :21:27.school, get a job, graphs, `nd then at the age of 65, you put your feet
:21:28. > :21:30.up, nip down to the post office once a week for your pension and enjoy
:21:31. > :21:34.your golden years, but not `ny more. More and more people are working
:21:35. > :21:39.way past the state pension `ge. There's a small army of oldhes,
:21:40. > :21:42.some into their 70s and even 80s, This is ABC Radio 4. Time for
:21:43. > :22:02.Farming Today. . Every day at the crack of d`wn
:22:03. > :22:05.John Brown goes to work It's been like that for last 60
:22:06. > :22:25.years and John, who turns 80 It's my life. What more do xou want
:22:26. > :22:34.for this? My wife and I havd had four days indoors, in 22 ye`rs.
:22:35. > :22:37.Like farmer Brown we're all living longer and pensions are worth less.
:22:38. > :22:39.And experts like Professor Carmichael say we better
:22:40. > :22:42.get used to the idea of working on and on and on.
:22:43. > :22:48.People will be expected to work for a longer, they will need to and many
:22:49. > :22:53.will want to work for longer but hopefully they will be able to work
:22:54. > :23:03.in different ways so there will be more flexible work, more part`time
:23:04. > :23:05.work. How old are you? If you are as old as him you will have owned a big
:23:06. > :23:09.increase in your old age pension. But this isn't what we were promised
:23:10. > :23:19.when the welfare state began. And this young fellow can afford to
:23:20. > :23:21.a secure old age. National Hnsurance contributions will build up the
:23:22. > :23:24.comfort for the old. Not me mate
:23:25. > :23:26.and according to a recent poll, half of all the people elighble for
:23:27. > :23:43.a state pension are still working, There are some people who c`nnot
:23:44. > :23:49.abide the idea of retiring. It is not just a regular IDE `` s`lary but
:23:50. > :23:57.who they are and what they do, and some people refuse to give tp.
:23:58. > :24:02.What's this? A parking tickdt. You are on double yellow lines.
:24:03. > :24:07.For nearly 30 years, Sue Me`kin was the scourge of Derby's motorists.
:24:08. > :24:11.A fearless no`nonsense traffic warden, who once slapped a ticket
:24:12. > :24:18.At 60 she retired ` but not for long.
:24:19. > :24:25.The first three weeks were fine because it was like being on an
:24:26. > :24:27.annual holiday but then the boredom set in and I wanted to get out and
:24:28. > :24:30.go to work. So, after just six weeks Sud was
:24:31. > :24:34.back working for the force ? getting even more aggro from
:24:35. > :24:43.the public behind the enquiry desk. Do you think your age helps in a job
:24:44. > :24:50.like this, because for example if I was coming through those doors and
:24:51. > :24:57.having a go at you, it would be like shouting at my Nan, if you don't
:24:58. > :25:01.mind me saying. Wouldn't it in nice to sit with your feet up watching
:25:02. > :25:08.countdown? No, not for me, H just wanted to be with my friends. For
:25:09. > :25:10.many people if they move from a situation where work is almost all
:25:11. > :25:16.of their lives and then suddenly there is a big gap, that can be very
:25:17. > :25:22.robbed a thick and it is like becoming unemployed cashback
:25:23. > :25:28.problematic. Cashback probldmatic. `` broke problematic.
:25:29. > :25:31.I still yearn for those good old days.
:25:32. > :25:39.I was hoping to turn 65, put my feet up and enjoy my twilight ye`rs, but
:25:40. > :25:44.now I think Will I ever be `ble to retire, because even now people are
:25:45. > :25:57.not eating about retiring btt retraining for a new career. That is
:25:58. > :26:01.frightening. It can be frightening and for many people may be
:26:02. > :26:12.impossible. The hard part c`n be identifying where the new c`reer is.
:26:13. > :26:14.For some, the move to a new career late in life can take an untsual
:26:15. > :26:17.turn. David Summers, a profession`l
:26:18. > :26:44.singer, retrained at the agd It mirrors the job I did before
:26:45. > :26:49.There is a love of theatre hnvolved in what we do, specifically on the
:26:50. > :27:02.funeral itself. The top part, tails and Kane, a wingback to the 192 s. I
:27:03. > :27:09.did tap dance, no. Never did. `` I don't tap dance. There is a lot of
:27:10. > :27:15.hard work, going back to school almost, at 65, it isn't easx but
:27:16. > :27:19.according to records, I am the oldest person to have successfully
:27:20. > :27:31.passed the diploma, so I am quite proud of that. You have to `dmire
:27:32. > :27:36.these veteran workers. Just don t ask them about their retirelent
:27:37. > :27:42.plans. John, have you ever thought you will put your feet up and do
:27:43. > :27:51.nothing now? No, it's my life. People retire and die. I am staying
:27:52. > :27:59.on until at least next wintdr because I will have 40 years in
:28:00. > :28:05.July. The company have a reputation for not requiring people to retire.
:28:06. > :28:11.A lot of people who have worked for it in the past into their 80s and I
:28:12. > :28:16.hope I can join that. The moral of the story is that we will h`ve to
:28:17. > :28:30.work well past the age of 64, but not me, I'm going back to the 1 50s.
:28:31. > :28:40.We'll get you one that works next time, Al.
:28:41. > :29:05.And that's it from Shackerstone on the banks of the Ashby C`nal
:29:06. > :29:08.Hello, I'm Ellie Crisell with your 90 second update.
:29:09. > :29:11.There's no return if you decide to leave the UK.
:29:12. > :29:13.David Cameron's message to Scotland ahead of this week's vote over
:29:14. > :29:17.The Yes campaign's Alex Salmond has branded claims that prices
:29:18. > :29:24.Two British tourists have been murdered on a beach in Thailand
:29:25. > :29:27.Police said 24-year-old David Miller and Hannah Witheridge, who's 23
:29:28. > :29:34.He's the child cancer specialist who's admitted abusing young boys