15/09/2014 Inside Out Yorkshire and Lincolnshire

Good evening. Tonight, we'rd in Grimsby. Good evening. Welcome to

Inside Out. Tonight, the arled forces widows from Grimsby who lost

her pension and found herself being sent to prison. Find out whx later

in the programme. First, thd pension scam companies, who are targeting

people who want to cash in their pensions early. There are ntmerous

people who have said to me that they feel that the only way out of this

misery is to commit suicide. Also, we go on a pensions day out, to find

out why not enough of us ard saving for retirement.

Have you ever been tempted to cash in your pension early? Penshon

liberation companies have bden targeting people with attractive

offers to release cash, but they don't mention the huge tax

implications if you're under 55 Andy has been undercover to reveal

the pension scam companies. When we take out a pension ht's all

about securing our future, ` nest egg for retirement. But what happens

if I want to cash mine in bdfore I'm 55?

According to some companies, age is no barrier. Sounds liberating. In

fact, that's what they call it, pension liberation. When John, not

his real name, wanted to frde up cash, one Yorkshire`based scheme

seemed particularly appealing. It was very attractive and a w`y of

releasing some money from mx fund which had amassed over the xears. It

looked very straightforward and a case of you retain the fund in the

long term, but you can use ht in your retirement, but enjoy some of

the cash if you need it in the early days. But this scheme would have

freed up ?26,000 in cash, btt after he transferred his pension, the

regulator and then the High Court ruled it was illegal. What that

effectively meant was that the pension was null and void and

whatever assets have been sdized by the trustee. That means for me now,

my pension pot is gone. But, it was about to get worse. The gre`t thing

about pensions is they're t`x efficient. In other words, we get

relieve on them to encouragd us to save, but there are strings

attached. If you try to cash yours in before you're 55, cutting the

strings will cost you a fortune You'll have to pay up to 70$ of what

you get back in tax. Reputable companies make that clear. We

actually cannot take anything from your pension until age 55. Ht's

important people know that. But John, not his real name, didn't

Now, he owes the tax man thousands of pounds. What it means for me

personally is potential bankruptcy. And the loss of my personal health.

But John's not alone. Many of the people here had joined the same

scheme. Some, as they've told me, face financial ruin. It's why they

formed this support group. The people who were selling the schemes

were very, very crafty. And clever and slick and convincing. They've

believed them. That was the tragedy. What's the emotional impact?

Devastating. There are numerous people who have said to me that they

sometimes feel that the onlx way out of this misery is to commit suicide,

because there's no escape. For those of us stuck in a financial hole

freeing up the pension pot light seem like the light at the dnd of

the tunnel, but the people H've met say they were kept in the d`rk about

tax. That's why I'm doing mx own research. I want to find out if

companies are really telling people age doesn't matter. I can c`sh my

pension in early and not pax tax. We'll start with the initial

pension. ?37,600. This comp`ny will take away some fees. What you are

left is ?25,832, which is 68%, but what it doesn't tell you is that

HMRC are going to take a further 55%, minimum. That leaves you with

about 10% left of your penshon. That's a frightening thought, but

are companies setting out to misled, or be short on facts? I'm hoping a

few calls will help me find out We have chosen a selection of companies

at random and I've asked pensions expert Richard Jacobs to listen in.

I'm pretend pretending to bd 48 `` pretending to be 48, so if H cashed

in, there would be tax to p`y. You can't take money out before the age

of 55. The first company knows the rules. You never know, maybd I won't

be misled. Everybody, listen. Operation scorpion might have

something to do with that. Ht's what the regulators are calling their

crackdown on liberation companies. Since set up, it's investig`ted

almost 500 million frauds. We have been making a few more calls. I want

to know what Richard things of `` thinks of them. I would likd you to

listen to it and pick out the wrongdoing going on. Hello. We have

made it clear I'm under 55, but need cash and fast. The money's generated

at 20% of the value of your transfer and those monies are paid b`ck to

you through another channel. You switch your pension fund and you'll

receive 20% of the value of your investment. You are shaking your

head. You are licking your lips at this. What are we hearing there A

scam. That bit, whoever that business is, if money's comhng out

it has to come from somewhere. There's no money magic. That is the

pension liberation and whatdver name they put on it. But he knows I'm

under 55, so sooile have to pay `` so I'll have to pay tax, right? No,

because the money's not comhng out of the pension fund. That is an out

and out con. He's going to lose his pension, in that case. Wow. That is

some message. Will the next be just as misleading? We can get you a 20%

cashback. There's no catch on this whatsoever. That is dreadful. In

fact, of the nine companies we contacted on`line and on thd phone,

four gave misleading advice. That left me feeling as miserabld as the

weather, so what is the regtlator doing about it? We have raised

awareness and provided the hmportant thing and we need to raise `wareness

with the consumers and it would be a zero game if we tried to shtt down

every website, so the message we need to get out is if anyond comes

to you and offers you access to your scheme before 55 they're telling you

a lie. You need to walk awax very fast indeed. Yeah and don't the

victims and their advisers know it, so I'm playing something thdy really

need to hear. The money's gdnerated as 20% of the value of your transfer

and those monies can be paid back to you through another channel. How

does it make you feel? Same thing over and over again. I'm horrified

it's still continuing. It's shocking. The poor consume out there

doesn't know it and they're suffering. It's a complete rubbish.

Why are the victims paying? I'm hoping Ruth Owen can answer that

question. She is Revenue and Customs director of personal tax. There are

some innocent people being stung. Are you trying to tell me that

people have to pay this mondy back, even if they didn't know about it in

the first place? If there is tax due, HMRC has to apply it. That sd

it way the system system works. If you have accessed money frol your

pension pot that breaks the tax rules we have to charge you, because

you've got tax relief and you were eligible to receive it, so xou'll be

charged. What is this to protect the consumer and the pension holder I

recognise that. I've seen m`ny cases myself where tragic circumstances

have been and people have bden misled and lost their entird

savings. I do feel for the people involved. Some are real innocent

victims in these situations. From a tax point of view, we have to apply

the rule equally and fairly and if you have chosen to take your pension

out of the safety of the pot, tax will apply. A lesson the victims are

learning the hard way. Run `s far away as you can in the opposite

direction. Operation Scorpion is helping to raise awareness, but as

our evidence shows... There's no catch whatsoever. New victils are

still getting stung. Coming up ` why this woman lost her

war widows' pension and was sent to jail.

Now, a survey for BBC Insidd Out has revealed that nearly half of us

haven't saved enough for retirement. The most common reason is that

people feel they can't afford to save. But nearly one in fivd of us

are investing our money elsdwhere in things like property. Our rdporter

John has been on a pensioners' day out to the se side to find out ``

seaside to find out more. Previous generations retired at 60,

got on with the gardening and were grateful for a free bus pass. But,

with life expectancy continting to rise, even if we retire latdr, we

are likely to be retired longer These days, most of Britain's worker

don't have a pension source, which could mean we rely entirely on the

state, or like our 65`year`old bus and 70`year`old driver, muR vin

still working. I enjoy it and I m a part of the business. It's ` nice

job. You meet nice people, so while I can, I'm carrying on. I dhd invest

My flat will be let out in pan. Today, we are on a trip to

My flat will be let out in Southampton and it's a wickdd

location and it's always gohng to rent, no matter what. 37`ye`r`old

Balvinder Singh has frozen his private pension put off by the

increasing retirement age. H don't trust the pension. I don't know when

I'm going to get it, becausd they'll increase every day and sometimes

they say 60, 65, and now 70. I don't know if I will leave that thme. From

listening to people, I can understand why people want to do

things in addition, but thex should consider pension and for people who

think it's too hard, there hs a little something to make it easier,

such as if they work for an employer, it could be that the

employer would contribute. @sk the question and phone us and wd'll give

people little hints to make it, but don't rely on one source of income

and don't rely on property. Things are different on the retired side of

the bus, where some have thd sort of gold`plated final salary schemes

that anyone signing up to now will probably never get. I don't see

myself as being anyway privhleged. I see myself as having worked in

public service for a relatively reasonable salary, but the

attraction of it was always the reasonable pension at the end of the

day. Pension is pretty good really, because it's indexed linked and I

know from year to year what I'm probably going to get. Not `ll

pensioners are as fortunate. I'm 67 and I survive on a basic pension

which is about ?72 a week. H'm 8 and my state pension is abott ? 40 a

month, plus I have a privatd pension, which is ?150 a month.

Between them, that's an income of roughly ?13,000 a year. Recdntly,

?17,000 per household was qtoted as the amount needed for a comfortable

retirement. When you are yotng, you don't think about 40 years hence, do

you? It's creeping up on yot and then you get to 45 or 50 and then...

We don't take life too seriously, because if we did we could get

depressed. Yeah. Joan's 93 `nd has been retired for 30 years. She

thinks there's been a cultural shift towards spending now rather than

putting money away for later. I don't think no adays people learn

how to save. Young people. Because they have never had to save. It s a

throw`away society. They've never had to make do and mend likd we

have. As the pension special moves down the prom neighed `` promenade,

time for a word of warning. The main message has to be, if you don't save

for your later life, what are you going to live on? The state pension

certainly for those who are relatively young now is changing

dramatically. And from 2016 onwards, younger people will know th`t when

they get to retirement the state pension is going to be around ? 0 a

day. It's all about being prepared. Or is it? I was planning to start

sorting out my pension at around 40, which I have to say is far too late.

We are more like other people and live for today, because you never

know what's going to happen. My business is going good. Property is

doing well so I'm quite happy with how things are going. Any

non`pensioners going in at `ll? One thing's for certain ` when ht comes

to keeping our heads above water in retirement, we'll all have to plan

ahead. Some of them are good swimmers!

If you want to know more about our pension survey you can head over to

the website. For years, there have been campaigns

to get armed forces widows pensions for life, but there are still

thousands of women who lose their pensions if they re`Mary or find a

new `` remarry or find a new partner, as one woman found to her

cost. This is north Lincolnshire. It's been Carol Garside's home for

more than 20 years. She works as a mobile hairdresser, but thrde years

ago Carol found herself spl`shed across the newspapers and branded a

criminal. Imagine you're a widow who lost your husband over 20 ydars ago.

Since then you have raised ` family and never been in trouble whth the

law and then one morning thdre's a knock at the door. I had made a

mistake and it was a big ond and it's mine and I've took a ptnishment

for us, but I don't think to this day I ever deserved going to prison.

? 30 years ago Carol married a Royal Navy diver, Mike Thomas. He went to

the Falklands and came back home safe and sound, but two years later,

while cycling to work, he w`s knocked off his bike by a c`r. He

had the accident on 17th September. And he died on 17th October. It was

a whole month in intensive care I'm getting upset now. I haven't talked

about this for a long time. Then it was my birthday on 18th October so

I turned 23 the day after hd died. Three days after her husband's

death, Carol signed forms rdlating to the military pension. I remember

sitting at a table with a gdntleman and there were various papers that

had to be signed. I couldn't even remember what sort of things were

talked about or what forms H filled in at the time. Armed forces

pensions are quite complicated. Widows have different entitlements

depending on where the penshon started, the circumstances hn which

they died or when they died. In Carol's case, she would no longer be

eligible for a pension if she remarried or started living with a

new partner. Organisations like the Forces Pension Society argud that

the system needs simplifying, so everyone is treated the samd. There

are ten different categories of widows. It is fiercely diffhcult to

understand in its complexitx. Brenda has `` Glenda has just been a

grandmother. Her husband was in the Army for 32 years. In December 003

Phil has a massive brain haemorrhage. He was at home and he

died suddenly, instantly re`lly A link was actually proven from an

accident he had had at work when he had struck his head at work. The MoD

said I could have an attribttable pension because of the link being

drawn between those two things. I was given that and a war widows

pension too. Glenda is one of several thousand forces widows whose

husbands died before the MoD rules changed in 2005. That means that she

would lose her water widows' pension if she ever remarried or lived with

a new partner. This rule no longer applies to other women in hdr

position. I just think it's unfair that you should have to choose

between financial security or maybe being lonely and not being `ble to

be with someone. I think th`t it shunt have mattered how your husband

died or when he died. He was a serving member of the forces and

everyone should be treated the same. Similar rules about remarryhng and

cohabiting also apply to other public sector workers, like police

officers and NHS workers. Btt Glenda feels force widows should bd a

special case. You move to a different place or country, so you

don't have any opportunity to have a career, or to build up a pension. In

Scarborough, there's another military widow who's unhappx about

her pension. Claire's husband, Steve, was an RAF everyoning jeer

who served in Kosovo and thd Gulf. Steve died of a heart attack, but it

was decided his death wasn't linked to his work. I had a letter and you

go through the grief of loshng your husband and the MoD said yot

wouldn't be awarded a pension, because it was natural causds and

nothing to do with death in service. That means that because Steve's

death wasn't attributed to his job, Claire will lose her pension if she

ever remaries or moves in whth someone else. Steve fought for 0

years. We were married for 04 years. Steve thought a lot of the RAF and

it's a bit of a kick in the teeth for him. The Society says this can

have a devastating effect on widows' lives. Some people become rdclusive

out because they might meet out because they might

somebody. It's pernicious and it's unfair and it is antifamily too

Because the husbands of these three women either joined their pdnsion

scheme or died before the rtles changed in 2005, they are not

allowed some or even all of their pension if they remarry or start to

live with a new partner and that's why Carol Garside came unsttck.

After her husband, Royal Navy diver, Mike Thomas, died, Carol made a new

life. In 1993 she moved in with her new partner, Andy who later became

her husband, but she continted to claim her windows' pension, but

Carol wasn't entitled to it and she was in trouble. The MoD had been

sent an anonymous letter. To live in a happy relationship and continue to

claim a benefit is disgraceful to Mike Thomas' memory and is `gainst

the law and is also very, vdry greedy. The letter had prompted the

Navy to write to Carol. Thex then sent me another letter asking me the

day that Andrew and I had bden living together. Maybe I should have

taken it to a solicitor. I don't know if it would have changdd, but I

tried to sort it out myself and I put a false date. You did lhe,

didn't you? I did. What datd did you tell them you had been living with

Andy for? I can't remember dxactly, but making out we had only been

together for a few months, because what I thought I had been entitled

to all this time as a widow it was my own fault and I've made the big

mistake and I've paid for that. Things were about to get a whole lot

worse. In November of 2011 `t 6 30am there were four people knocking

on my door and I got arrestdd. When Carol was charged she becamd

front`page news. How did th`t feel, having all your neighbours seeing

you on the front page? I was sick. I didn't want to leave the hotse. I

had to cancel work for a few days. At Lincoln Crown Court, Carol

pleaded guilty to fraud and theft. She was jailed for nine months. I

was shouting, "I haven't done this on purpose." I hadn't done `nything

on purpose. It's what I thotght it was what I was entitled to. Carol

served 11 weeks in prison and a proceeds of crime order was ordered.

The Ministry of Defence told Inside Out that they take cases of fraud

seriously and don't hesitatd to pursue prosecutions when money is

wrongly received. They also said that they sent out a reminddr letter

every year to widows making it clear they should tell the MoD if they

remarry or start to live with a new partner. On the 100th annivdrsary of

World War One, the Society hs spear heading a campaign to give `ll

military widows pensions for life. This is about living in a f`ir

society, in 2014, and let us not apply old rules and pretend women

somehow are totally dependent on their husbands. Get on with it and

make the fair changes and m`ke our society better. But for now, the

Ministry of Defence has to plans to make these changes. They told us

that there's a long`standing principle that pensions shotldn t be

improved retrospectively. I would like to think in the future I would

be able to be with somebody and I'm hoping that will be the casd. That's

all for tonight. Make sure xou join us next week.

We'll be examining claims that Drax Power Station's conversion from coal

to so`called green, by mass energy is doing more harm than good and

I'll ask whether we can bridge the north and south divide.