Rogue firms are trying to entice cash-strapped pension savers into freeing up their retirement pot before the law allows, a campaign by regulators has warned.
Campaigners fear that people are not always being made aware that the tax charges and fees from doing so could wipe out most of their pension pot, leaving them with little cash for their retirement.
Accessing a pension before the age of 55 can result in an "unauthorised payment", which can attract significant tax charges and penalties.
The Pensions Regulator, which is one of the agencies involved in the campaign, estimates that around £400 million has been transferred from funds in this way and it believes that more people are being tempted into liberating their pensions too early due to the tough economic climate.
Firms often work alongside "introducers" who bombard consumers with spam texts, make cold calls and put up website promotions to encourage people to release a portion of their cash before they reach the age of 55.
The campaign, which is also being backed by the City watchdog and the tax authorities, warned that people should be wary if they are approached out of the blue by text or cold called. They should also watch out for companies offering a "loan", a "savings advance" or "cashback" from a pension as well as any reference to "loopholes" or overseas investments.
The Financial Services Authority's head of financial crime Sharon Campbell said: "Savers should be very wary of pension release schemes which often carry punitive, hidden rates of commission and where the promised investments may just be scams. They could end up losing all of their hard-earned pension."
Pensions Minister Steve Webb said: "Money in a pension is there for retirement and should not be released before at least the age of 55. The Government is investigating a number of schemes where firms appear to be preying on people when times are tight, and I am working closely with the Pensions Regulator to ensure rules are not being broken."
The campaign comes at a time when the Government is trying to encourage more people into pension saving, with its automatic enrolment scheme which will eventually see around 10 million people saving into workplace pensions.
HM Revenue and Customs' head of pensions business Graeme Hood said: "HMRC is committed to ensuring savings built up with the benefit of generous tax reliefs are not misused. We will take action to detect and pursue those who deliberately break or bend the rules, including those offering schemes to access pension savings other than as intended by Parliament."