The Insolvency Service has wound up a pension liberation company which helped savers access their funds earlier than allowed, following a High Court battle.
Thames Trustees, which acted as trustee of the Westminster Pension Scheme, coaxed clients into moving their retirement funds into the scheme, which was set up in December 2012.
Clients were promised they would receive a cash loan of around 50% of their transfer, or commission on the scheme's investments. Around £3.3m was transferred into the scheme, across 79 members.
However, the Insolvency Service's investigation found the company did not have any intention to ask clients to repay the loans. Instead, it operated as a liberation scheme providing access to savings earlier than is legally allowed.
The investigation also found directors of the company had no knowledge of its activities or investments, while investments were not made for a true commercial purpose, with significant discrepancies in the documentation.
The Insolvency Service also said those in control of the company took commission payments from funds transferred into the scheme without informing clients.
Investigation supervisor Colin Cronin said the investment of the funds was not legitimate.
"The structure of this pension liberation scheme was deliberately opaque and the lack of transparency was added to by the failure of those in control of the company to fully cooperate with the investigation.
"The operation of the scheme was highly prejudicial to the clients who were required to invest their pension funds into in order to obtain the early release of part of those funds. The balance of funds were not legitimately invested as clients were led to believe. These proceedings show the Insolvency Service will take firm action against companies which mislead the public in this way."
The scheme was officially wound up on 11 July 2016.
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