The Pensions Regulator, Financial Services Authority (FSA) and HM Revenue and Customs (HMRC) have detected an increase in these schemes, with known transferred funds amounting to nearly £200 million by the end of 2011.
The organisations are urging individuals not to be taken in by website promotions, cold-calls or adverts encouraging them to transfer their existing occupational or private pension to a new arrangement in order to access a cash payment or loan.
These schemes usually work by transferring some of the member's pension fund into risky or opaque investment structures, frequently based overseas - with no guarantee that members will get their money back if something goes wrong.
By accessing pension savings earlier than the law permits, individuals are likely to be poorer in retirement - and can face substantial tax charges.
Victoria Holmes, case team leader at The Pensions Regulator said: "These offers are typically advertised on websites or small adverts in newspapers. If the offer sounds too good to be true, it probably is. It may simply be a scam designed to get hold of your money. Transferring your pension to one of these questionable investment models could result in you losing your entire pension. "Immediate financial gain may sound tempting, particularly in the current economic climate. But don't be taken in - you are likely to face substantial tax charges and will be poorer in retirement." Graeme Hood, head of HMRC's pension schemes office, added: "Tax relief given on pension saving is intended to encourage individuals to save for the long-term to provide them with an income in retirement. That is why UK tax rules set a minimum age from which benefits from pension savings can normally be accessed.
"HMRC is committed to ensuring that the rules around the age from which benefits can be taken from pension funds are protected and that savings built up with the benefit of generous tax reliefs are not misused. We will take firm action to detect and pursue those who deliberately break the rules by offering schemes to access pension savings other than as intended by Parliament."
Commenting today on the advice of the Pension Regulator, Financial Services Authority and HMRC to steer clear of early release pension offers, TUC general secretary Brendan Barber said: "Just as dodgy "loan deals have been put firmly in the spotlight, the Pensions Regulator is absolutely right to warn against pension sharks too.
"With real wages falling and personal finances stretched it's understandable that some people might be tempted to trade their pension for short-term cash.
"But anyone under the age of 55 who transfers their pension into a loan could end up a big loser. Our best advice is to avoid doing so."
