Despite tentative signs of economic recovery, times remain hard for many people. The cost of living continues to rise faster than wages and unemployment remains high. For those struggling tofinance their day-to-day living, the idea of ‘pension liberation”’ might sound attractive – but there are serious long-term risks.Pension liberation involves the transfer of an individual’s pension savings to a scheme allowing them to gain access to the funds in their pension pot before the key age of 55. However, an“unauthorised payment” from a pension scheme is likely to incur tax charges of more than 50% of the total value of the pension pot . Although there are certain rare situations , such as aterminal illness, that might permit a scheme member to access their funds early, dipping into your pension pot before the age of 55 will almost certainly land you with a substantial tax bill.The Information Commissioner’s Office (ICO) has reported a “dramatic” rise in unsolicited approaches to pension scheme members, encouraging them to withdraw a proportion of their savings before the age of 55. The ICO estimates up to £400m has been released from legitimate UK pension schemes into schemes that range from high-risk to non-existent. Some members have had to absorb unexpected and substantial administration fees and taxes while others have had to face thefact their savings have been taken by fraudsters. It is important to differentiate between pension liberation fraud and ‘pension unlocking’ – a legitimate move that allows a pension scheme member, aged 55 or over, to release up to 25% of their pension savings as a tax-free lump sum. Nevertheless,pension unlocking should still only be considered in the most exceptional circumstances, as it is likely to lead to a lower level of income in retirement.The ICO reports that “spam” text messages relating to pension liberation have more than tripled during the past six months. Meanwhile, the Pensions Advisory Service has warned that pension liberation fraud is on the rise in the UK, and policeinvestigations into pension liberation schemes have stepped up.Although the Pensions Regulator provides information for pension scheme trustees, there is still no law empowering trustees to prevent the transfer of a member’s pension saving.