:00:16. > :00:27.Good evening. Tonight, we'rd in Grimsby. Good evening. Welcome to
:00:28. > :00:31.Inside Out. Tonight, the arled forces widows from Grimsby who lost
:00:32. > :00:37.her pension and found herself being sent to prison. Find out whx later
:00:38. > :00:41.in the programme. First, thd pension scam companies, who are targeting
:00:42. > :00:46.people who want to cash in their pensions early. There are ntmerous
:00:47. > :00:51.people who have said to me that they feel that the only way out of this
:00:52. > :00:57.misery is to commit suicide. Also, we go on a pensions day out, to find
:00:58. > :01:04.out why not enough of us ard saving for retirement.
:01:05. > :01:08.Have you ever been tempted to cash in your pension early? Penshon
:01:09. > :01:11.liberation companies have bden targeting people with attractive
:01:12. > :01:17.offers to release cash, but they don't mention the huge tax
:01:18. > :01:25.implications if you're under 55 Andy has been undercover to reveal
:01:26. > :01:31.the pension scam companies. When we take out a pension ht's all
:01:32. > :01:37.about securing our future, ` nest egg for retirement. But what happens
:01:38. > :01:42.if I want to cash mine in bdfore I'm 55?
:01:43. > :01:47.According to some companies, age is no barrier. Sounds liberating. In
:01:48. > :01:55.fact, that's what they call it, pension liberation. When John, not
:01:56. > :01:58.his real name, wanted to frde up cash, one Yorkshire`based scheme
:01:59. > :02:02.seemed particularly appealing. It was very attractive and a w`y of
:02:03. > :02:07.releasing some money from mx fund which had amassed over the xears. It
:02:08. > :02:11.looked very straightforward and a case of you retain the fund in the
:02:12. > :02:14.long term, but you can use ht in your retirement, but enjoy some of
:02:15. > :02:20.the cash if you need it in the early days. But this scheme would have
:02:21. > :02:25.freed up ?26,000 in cash, btt after he transferred his pension, the
:02:26. > :02:28.regulator and then the High Court ruled it was illegal. What that
:02:29. > :02:33.effectively meant was that the pension was null and void and
:02:34. > :02:40.whatever assets have been sdized by the trustee. That means for me now,
:02:41. > :02:44.my pension pot is gone. But, it was about to get worse. The gre`t thing
:02:45. > :02:49.about pensions is they're t`x efficient. In other words, we get
:02:50. > :02:55.relieve on them to encouragd us to save, but there are strings
:02:56. > :02:59.attached. If you try to cash yours in before you're 55, cutting the
:03:00. > :03:09.strings will cost you a fortune You'll have to pay up to 70$ of what
:03:10. > :03:19.you get back in tax. Reputable companies make that clear. We
:03:20. > :03:25.actually cannot take anything from your pension until age 55. Ht's
:03:26. > :03:32.important people know that. But John, not his real name, didn't
:03:33. > :03:39.Now, he owes the tax man thousands of pounds. What it means for me
:03:40. > :03:44.personally is potential bankruptcy. And the loss of my personal health.
:03:45. > :03:49.But John's not alone. Many of the people here had joined the same
:03:50. > :03:53.scheme. Some, as they've told me, face financial ruin. It's why they
:03:54. > :03:58.formed this support group. The people who were selling the schemes
:03:59. > :04:03.were very, very crafty. And clever and slick and convincing. They've
:04:04. > :04:07.believed them. That was the tragedy. What's the emotional impact?
:04:08. > :04:11.Devastating. There are numerous people who have said to me that they
:04:12. > :04:19.sometimes feel that the onlx way out of this misery is to commit suicide,
:04:20. > :04:23.because there's no escape. For those of us stuck in a financial hole
:04:24. > :04:27.freeing up the pension pot light seem like the light at the dnd of
:04:28. > :04:31.the tunnel, but the people H've met say they were kept in the d`rk about
:04:32. > :04:35.tax. That's why I'm doing mx own research. I want to find out if
:04:36. > :04:43.companies are really telling people age doesn't matter. I can c`sh my
:04:44. > :04:49.pension in early and not pax tax. We'll start with the initial
:04:50. > :04:58.pension. ?37,600. This comp`ny will take away some fees. What you are
:04:59. > :05:04.left is ?25,832, which is 68%, but what it doesn't tell you is that
:05:05. > :05:10.HMRC are going to take a further 55%, minimum. That leaves you with
:05:11. > :05:15.about 10% left of your penshon. That's a frightening thought, but
:05:16. > :05:20.are companies setting out to misled, or be short on facts? I'm hoping a
:05:21. > :05:25.few calls will help me find out We have chosen a selection of companies
:05:26. > :05:31.at random and I've asked pensions expert Richard Jacobs to listen in.
:05:32. > :05:36.I'm pretend pretending to bd 48 `` pretending to be 48, so if H cashed
:05:37. > :05:40.in, there would be tax to p`y. You can't take money out before the age
:05:41. > :05:48.of 55. The first company knows the rules. You never know, maybd I won't
:05:49. > :05:52.be misled. Everybody, listen. Operation scorpion might have
:05:53. > :05:56.something to do with that. Ht's what the regulators are calling their
:05:57. > :06:05.crackdown on liberation companies. Since set up, it's investig`ted
:06:06. > :06:09.almost 500 million frauds. We have been making a few more calls. I want
:06:10. > :06:13.to know what Richard things of `` thinks of them. I would likd you to
:06:14. > :06:20.listen to it and pick out the wrongdoing going on. Hello. We have
:06:21. > :06:28.made it clear I'm under 55, but need cash and fast. The money's generated
:06:29. > :06:33.at 20% of the value of your transfer and those monies are paid b`ck to
:06:34. > :06:37.you through another channel. You switch your pension fund and you'll
:06:38. > :06:41.receive 20% of the value of your investment. You are shaking your
:06:42. > :06:49.head. You are licking your lips at this. What are we hearing there A
:06:50. > :06:53.scam. That bit, whoever that business is, if money's comhng out
:06:54. > :06:57.it has to come from somewhere. There's no money magic. That is the
:06:58. > :07:05.pension liberation and whatdver name they put on it. But he knows I'm
:07:06. > :07:09.under 55, so sooile have to pay `` so I'll have to pay tax, right? No,
:07:10. > :07:17.because the money's not comhng out of the pension fund. That is an out
:07:18. > :07:25.and out con. He's going to lose his pension, in that case. Wow. That is
:07:26. > :07:31.some message. Will the next be just as misleading? We can get you a 20%
:07:32. > :07:37.cashback. There's no catch on this whatsoever. That is dreadful. In
:07:38. > :07:42.fact, of the nine companies we contacted on`line and on thd phone,
:07:43. > :07:45.four gave misleading advice. That left me feeling as miserabld as the
:07:46. > :07:50.weather, so what is the regtlator doing about it? We have raised
:07:51. > :07:55.awareness and provided the hmportant thing and we need to raise `wareness
:07:56. > :07:59.with the consumers and it would be a zero game if we tried to shtt down
:08:00. > :08:04.every website, so the message we need to get out is if anyond comes
:08:05. > :08:08.to you and offers you access to your scheme before 55 they're telling you
:08:09. > :08:16.a lie. You need to walk awax very fast indeed. Yeah and don't the
:08:17. > :08:21.victims and their advisers know it, so I'm playing something thdy really
:08:22. > :08:28.need to hear. The money's gdnerated as 20% of the value of your transfer
:08:29. > :08:32.and those monies can be paid back to you through another channel. How
:08:33. > :08:36.does it make you feel? Same thing over and over again. I'm horrified
:08:37. > :08:42.it's still continuing. It's shocking. The poor consume out there
:08:43. > :08:56.doesn't know it and they're suffering. It's a complete rubbish.
:08:57. > :09:00.Why are the victims paying? I'm hoping Ruth Owen can answer that
:09:01. > :09:03.question. She is Revenue and Customs director of personal tax. There are
:09:04. > :09:08.some innocent people being stung. Are you trying to tell me that
:09:09. > :09:13.people have to pay this mondy back, even if they didn't know about it in
:09:14. > :09:17.the first place? If there is tax due, HMRC has to apply it. That sd
:09:18. > :09:22.it way the system system works. If you have accessed money frol your
:09:23. > :09:26.pension pot that breaks the tax rules we have to charge you, because
:09:27. > :09:30.you've got tax relief and you were eligible to receive it, so xou'll be
:09:31. > :09:36.charged. What is this to protect the consumer and the pension holder I
:09:37. > :09:41.recognise that. I've seen m`ny cases myself where tragic circumstances
:09:42. > :09:43.have been and people have bden misled and lost their entird
:09:44. > :09:49.savings. I do feel for the people involved. Some are real innocent
:09:50. > :09:53.victims in these situations. From a tax point of view, we have to apply
:09:54. > :09:57.the rule equally and fairly and if you have chosen to take your pension
:09:58. > :10:06.out of the safety of the pot, tax will apply. A lesson the victims are
:10:07. > :10:11.learning the hard way. Run `s far away as you can in the opposite
:10:12. > :10:17.direction. Operation Scorpion is helping to raise awareness, but as
:10:18. > :10:30.our evidence shows... There's no catch whatsoever. New victils are
:10:31. > :10:34.still getting stung. Coming up ` why this woman lost her
:10:35. > :10:42.war widows' pension and was sent to jail.
:10:43. > :10:46.Now, a survey for BBC Insidd Out has revealed that nearly half of us
:10:47. > :10:49.haven't saved enough for retirement. The most common reason is that
:10:50. > :10:54.people feel they can't afford to save. But nearly one in fivd of us
:10:55. > :10:59.are investing our money elsdwhere in things like property. Our rdporter
:11:00. > :11:02.John has been on a pensioners' day out to the se side to find out ``
:11:03. > :11:15.seaside to find out more. Previous generations retired at 60,
:11:16. > :11:21.got on with the gardening and were grateful for a free bus pass. But,
:11:22. > :11:25.with life expectancy continting to rise, even if we retire latdr, we
:11:26. > :11:30.are likely to be retired longer These days, most of Britain's worker
:11:31. > :11:35.don't have a pension source, which could mean we rely entirely on the
:11:36. > :11:39.state, or like our 65`year`old bus and 70`year`old driver, muR vin
:11:40. > :11:44.still working. I enjoy it and I m a part of the business. It's ` nice
:11:45. > :11:51.job. You meet nice people, so while I can, I'm carrying on. I dhd invest
:11:52. > :14:58.My flat will be let out in pan. Today, we are on a trip to
:14:59. > :15:01.My flat will be let out in Southampton and it's a wickdd
:15:02. > :15:09.location and it's always gohng to rent, no matter what. 37`ye`r`old
:15:10. > :15:13.Balvinder Singh has frozen his private pension put off by the
:15:14. > :15:18.increasing retirement age. H don't trust the pension. I don't know when
:15:19. > :15:22.I'm going to get it, becausd they'll increase every day and sometimes
:15:23. > :15:27.they say 60, 65, and now 70. I don't know if I will leave that thme. From
:15:28. > :15:33.listening to people, I can understand why people want to do
:15:34. > :15:36.things in addition, but thex should consider pension and for people who
:15:37. > :15:40.think it's too hard, there hs a little something to make it easier,
:15:41. > :15:45.such as if they work for an employer, it could be that the
:15:46. > :15:51.employer would contribute. @sk the question and phone us and wd'll give
:15:52. > :16:02.people little hints to make it, but don't rely on one source of income
:16:03. > :16:08.and don't rely on property. Things are different on the retired side of
:16:09. > :16:11.the bus, where some have thd sort of gold`plated final salary schemes
:16:12. > :16:17.that anyone signing up to now will probably never get. I don't see
:16:18. > :16:22.myself as being anyway privhleged. I see myself as having worked in
:16:23. > :16:25.public service for a relatively reasonable salary, but the
:16:26. > :16:31.attraction of it was always the reasonable pension at the end of the
:16:32. > :16:35.day. Pension is pretty good really, because it's indexed linked and I
:16:36. > :16:43.know from year to year what I'm probably going to get. Not `ll
:16:44. > :16:52.pensioners are as fortunate. I'm 67 and I survive on a basic pension
:16:53. > :16:58.which is about ?72 a week. H'm 8 and my state pension is abott ? 40 a
:16:59. > :17:03.month, plus I have a privatd pension, which is ?150 a month.
:17:04. > :17:09.Between them, that's an income of roughly ?13,000 a year. Recdntly,
:17:10. > :17:15.?17,000 per household was qtoted as the amount needed for a comfortable
:17:16. > :17:21.retirement. When you are yotng, you don't think about 40 years hence, do
:17:22. > :17:28.you? It's creeping up on yot and then you get to 45 or 50 and then...
:17:29. > :17:38.We don't take life too seriously, because if we did we could get
:17:39. > :17:43.depressed. Yeah. Joan's 93 `nd has been retired for 30 years. She
:17:44. > :17:47.thinks there's been a cultural shift towards spending now rather than
:17:48. > :17:53.putting money away for later. I don't think no adays people learn
:17:54. > :17:59.how to save. Young people. Because they have never had to save. It s a
:18:00. > :18:07.throw`away society. They've never had to make do and mend likd we
:18:08. > :18:12.have. As the pension special moves down the prom neighed `` promenade,
:18:13. > :18:16.time for a word of warning. The main message has to be, if you don't save
:18:17. > :18:22.for your later life, what are you going to live on? The state pension
:18:23. > :18:29.certainly for those who are relatively young now is changing
:18:30. > :18:33.dramatically. And from 2016 onwards, younger people will know th`t when
:18:34. > :18:39.they get to retirement the state pension is going to be around ? 0 a
:18:40. > :18:45.day. It's all about being prepared. Or is it? I was planning to start
:18:46. > :18:51.sorting out my pension at around 40, which I have to say is far too late.
:18:52. > :18:54.We are more like other people and live for today, because you never
:18:55. > :18:58.know what's going to happen. My business is going good. Property is
:18:59. > :19:02.doing well so I'm quite happy with how things are going. Any
:19:03. > :19:06.non`pensioners going in at `ll? One thing's for certain ` when ht comes
:19:07. > :19:12.to keeping our heads above water in retirement, we'll all have to plan
:19:13. > :19:18.ahead. Some of them are good swimmers!
:19:19. > :19:22.If you want to know more about our pension survey you can head over to
:19:23. > :19:36.the website. For years, there have been campaigns
:19:37. > :19:41.to get armed forces widows pensions for life, but there are still
:19:42. > :19:46.thousands of women who lose their pensions if they re`Mary or find a
:19:47. > :19:51.new `` remarry or find a new partner, as one woman found to her
:19:52. > :19:56.cost. This is north Lincolnshire. It's been Carol Garside's home for
:19:57. > :20:00.more than 20 years. She works as a mobile hairdresser, but thrde years
:20:01. > :20:06.ago Carol found herself spl`shed across the newspapers and branded a
:20:07. > :20:10.criminal. Imagine you're a widow who lost your husband over 20 ydars ago.
:20:11. > :20:14.Since then you have raised ` family and never been in trouble whth the
:20:15. > :20:21.law and then one morning thdre's a knock at the door. I had made a
:20:22. > :20:26.mistake and it was a big ond and it's mine and I've took a ptnishment
:20:27. > :20:32.for us, but I don't think to this day I ever deserved going to prison.
:20:33. > :20:35.? 30 years ago Carol married a Royal Navy diver, Mike Thomas. He went to
:20:36. > :20:39.the Falklands and came back home safe and sound, but two years later,
:20:40. > :20:45.while cycling to work, he w`s knocked off his bike by a c`r. He
:20:46. > :20:54.had the accident on 17th September. And he died on 17th October. It was
:20:55. > :21:00.a whole month in intensive care I'm getting upset now. I haven't talked
:21:01. > :21:04.about this for a long time. Then it was my birthday on 18th October so
:21:05. > :21:09.I turned 23 the day after hd died. Three days after her husband's
:21:10. > :21:14.death, Carol signed forms rdlating to the military pension. I remember
:21:15. > :21:18.sitting at a table with a gdntleman and there were various papers that
:21:19. > :21:21.had to be signed. I couldn't even remember what sort of things were
:21:22. > :21:27.talked about or what forms H filled in at the time. Armed forces
:21:28. > :21:31.pensions are quite complicated. Widows have different entitlements
:21:32. > :21:34.depending on where the penshon started, the circumstances hn which
:21:35. > :21:38.they died or when they died. In Carol's case, she would no longer be
:21:39. > :21:44.eligible for a pension if she remarried or started living with a
:21:45. > :21:47.new partner. Organisations like the Forces Pension Society argud that
:21:48. > :21:53.the system needs simplifying, so everyone is treated the samd. There
:21:54. > :22:05.are ten different categories of widows. It is fiercely diffhcult to
:22:06. > :22:10.understand in its complexitx. Brenda has `` Glenda has just been a
:22:11. > :22:15.grandmother. Her husband was in the Army for 32 years. In December 003
:22:16. > :22:26.Phil has a massive brain haemorrhage. He was at home and he
:22:27. > :22:29.died suddenly, instantly re`lly A link was actually proven from an
:22:30. > :22:34.accident he had had at work when he had struck his head at work. The MoD
:22:35. > :22:40.said I could have an attribttable pension because of the link being
:22:41. > :22:45.drawn between those two things. I was given that and a war widows
:22:46. > :22:50.pension too. Glenda is one of several thousand forces widows whose
:22:51. > :22:55.husbands died before the MoD rules changed in 2005. That means that she
:22:56. > :22:59.would lose her water widows' pension if she ever remarried or lived with
:23:00. > :23:03.a new partner. This rule no longer applies to other women in hdr
:23:04. > :23:08.position. I just think it's unfair that you should have to choose
:23:09. > :23:14.between financial security or maybe being lonely and not being `ble to
:23:15. > :23:18.be with someone. I think th`t it shunt have mattered how your husband
:23:19. > :23:23.died or when he died. He was a serving member of the forces and
:23:24. > :23:27.everyone should be treated the same. Similar rules about remarryhng and
:23:28. > :23:35.cohabiting also apply to other public sector workers, like police
:23:36. > :23:39.officers and NHS workers. Btt Glenda feels force widows should bd a
:23:40. > :23:45.special case. You move to a different place or country, so you
:23:46. > :23:52.don't have any opportunity to have a career, or to build up a pension. In
:23:53. > :23:56.Scarborough, there's another military widow who's unhappx about
:23:57. > :24:02.her pension. Claire's husband, Steve, was an RAF everyoning jeer
:24:03. > :24:06.who served in Kosovo and thd Gulf. Steve died of a heart attack, but it
:24:07. > :24:14.was decided his death wasn't linked to his work. I had a letter and you
:24:15. > :24:19.go through the grief of loshng your husband and the MoD said yot
:24:20. > :24:24.wouldn't be awarded a pension, because it was natural causds and
:24:25. > :24:27.nothing to do with death in service. That means that because Steve's
:24:28. > :24:32.death wasn't attributed to his job, Claire will lose her pension if she
:24:33. > :24:38.ever remaries or moves in whth someone else. Steve fought for 0
:24:39. > :24:42.years. We were married for 04 years. Steve thought a lot of the RAF and
:24:43. > :24:47.it's a bit of a kick in the teeth for him. The Society says this can
:24:48. > :24:52.have a devastating effect on widows' lives. Some people become rdclusive
:24:53. > :24:55.out because they might meet out because they might
:24:56. > :25:02.somebody. It's pernicious and it's unfair and it is antifamily too
:25:03. > :25:06.Because the husbands of these three women either joined their pdnsion
:25:07. > :25:10.scheme or died before the rtles changed in 2005, they are not
:25:11. > :25:15.allowed some or even all of their pension if they remarry or start to
:25:16. > :25:24.live with a new partner and that's why Carol Garside came unsttck.
:25:25. > :25:29.After her husband, Royal Navy diver, Mike Thomas, died, Carol made a new
:25:30. > :25:33.life. In 1993 she moved in with her new partner, Andy who later became
:25:34. > :25:37.her husband, but she continted to claim her windows' pension, but
:25:38. > :25:45.Carol wasn't entitled to it and she was in trouble. The MoD had been
:25:46. > :25:51.sent an anonymous letter. To live in a happy relationship and continue to
:25:52. > :25:54.claim a benefit is disgraceful to Mike Thomas' memory and is `gainst
:25:55. > :26:00.the law and is also very, vdry greedy. The letter had prompted the
:26:01. > :26:04.Navy to write to Carol. Thex then sent me another letter asking me the
:26:05. > :26:08.day that Andrew and I had bden living together. Maybe I should have
:26:09. > :26:12.taken it to a solicitor. I don't know if it would have changdd, but I
:26:13. > :26:18.tried to sort it out myself and I put a false date. You did lhe,
:26:19. > :26:22.didn't you? I did. What datd did you tell them you had been living with
:26:23. > :26:25.Andy for? I can't remember dxactly, but making out we had only been
:26:26. > :26:30.together for a few months, because what I thought I had been entitled
:26:31. > :26:34.to all this time as a widow it was my own fault and I've made the big
:26:35. > :26:41.mistake and I've paid for that. Things were about to get a whole lot
:26:42. > :26:47.worse. In November of 2011 `t 6 30am there were four people knocking
:26:48. > :26:52.on my door and I got arrestdd. When Carol was charged she becamd
:26:53. > :26:57.front`page news. How did th`t feel, having all your neighbours seeing
:26:58. > :27:04.you on the front page? I was sick. I didn't want to leave the hotse. I
:27:05. > :27:07.had to cancel work for a few days. At Lincoln Crown Court, Carol
:27:08. > :27:14.pleaded guilty to fraud and theft. She was jailed for nine months. I
:27:15. > :27:21.was shouting, "I haven't done this on purpose." I hadn't done `nything
:27:22. > :27:28.on purpose. It's what I thotght it was what I was entitled to. Carol
:27:29. > :27:34.served 11 weeks in prison and a proceeds of crime order was ordered.
:27:35. > :27:39.The Ministry of Defence told Inside Out that they take cases of fraud
:27:40. > :27:42.seriously and don't hesitatd to pursue prosecutions when money is
:27:43. > :27:47.wrongly received. They also said that they sent out a reminddr letter
:27:48. > :27:51.every year to widows making it clear they should tell the MoD if they
:27:52. > :27:59.remarry or start to live with a new partner. On the 100th annivdrsary of
:28:00. > :28:02.World War One, the Society hs spear heading a campaign to give `ll
:28:03. > :28:09.military widows pensions for life. This is about living in a f`ir
:28:10. > :28:12.society, in 2014, and let us not apply old rules and pretend women
:28:13. > :28:16.somehow are totally dependent on their husbands. Get on with it and
:28:17. > :28:21.make the fair changes and m`ke our society better. But for now, the
:28:22. > :28:29.Ministry of Defence has to plans to make these changes. They told us
:28:30. > :28:33.that there's a long`standing principle that pensions shotldn t be
:28:34. > :28:36.improved retrospectively. I would like to think in the future I would
:28:37. > :28:43.be able to be with somebody and I'm hoping that will be the casd. That's
:28:44. > :28:45.all for tonight. Make sure xou join us next week.
:28:46. > :28:53.We'll be examining claims that Drax Power Station's conversion from coal
:28:54. > :28:56.to so`called green, by mass energy is doing more harm than good and
:28:57. > :28:58.I'll ask whether we can bridge the north and south divide.