Section 32 buyout

saxonborg

Hi
I have a section 32 buyout bond with an insurance company, it has a guaranteed minimum pension clause, it matures mid 2010, what might be my options, I hear that annuity rates are likely to fall so I was considering the draw down option but I dont know at what amount this can be invoked.
Grateful for any advice
many thanks

dunstonh

Most Section 32 buy out bonds dont have a drawdown option. You would have to convert them to another plan and that usually means losing a lot of money (depends on GMP). If you are even considering this then I recommend you use an IFA if you dont know the pros and cons because what you are suggesting has the potential to lose you a fortune. It may be ok but its not a gamble you really should be taking with a once in a lifetime decision that is cast in stone once done.

MikeJones_2

Hi saxonborg,

saxonborg wrote: »

I have a section 32 buyout bond with an insurance company, it has a guaranteed minimum pension clause, it matures mid 2010, what might be my options, I

To clarify, is the maturity date the same date as your State Pension Age?

Mike

I work in the field of Pension Education and Pension Guidance in the UK. I am a member of the Specialist Pensions Forum as well as being a Voluntary Adviser for The Pensions Advisory Service. I work with scheme members, employers, trustees, scheme administrators and advisers on most things to do with employer sponsored pension schemes. The views expressed by me in this thread are my personal opinions. You should seek professional advice from an appropriately experienced and qualified adviser. I am not an IFA.

EdInvestor

saxonborg wrote: »

Hi
I have a section 32 buyout bond with an insurance company, it has a guaranteed minimum pension clause, it matures mid 2010, what might be my options, I hear that annuity rates are likely to fall so I was considering the draw down option but I dont know at what amount this can be invoked.
Grateful for any advice
many thanks

It is likely that the guaranteed GMP pension will be higher than the income you could get by using the fund to buy an annuity or get a drawdown income.

What is the value of the fund and what is the GMP amount?

nrsql

I had assumed one would just take the GMP?
Aren't these things quite old and the GMP usually a lot more than you would get from the fund?

Of course you would need to look at the figures and your situation but wouldn't that usually be the obvious choice - or is there something that stops you from doing that?

edit
re-reading dunstoh's reply he was saying how you could get a drawdown - the "You would have to" refers to the previous sentence.

saxonborg

Yes the maturity date is the same as my retirement date.

MikeJones wrote: »

Hi saxonborg,



To clarify, is the maturity date the same date as your State Pension Age?

Mike

I work in the field of Pension Education and Pension Guidance in the UK. I am a member of the Specialist Pensions Forum as well as being a Voluntary Adviser for The Pensions Advisory Service. I work with scheme members, employers, trustees, scheme administrators and advisers on most things to do with employer sponsored pension schemes. The views expressed by me in this thread are my personal opinions. You should seek professional advice from an appropriately experienced and qualified adviser. I am not an IFA.

saxonborg

£6247pa and approx £140,000

EdInvestor

You can check annuity rates here:

http://www.fsa.gov.uk/tables

How much tax free cash can you take from the S32?

dunstonh

Dont rely on the annuity rates published on the FSA site as they are not updated enough and make a number of assumptions. Useful guide but thats all.

EdInvestor

There are many online calculators, here's another one

http://www.find.co.uk/pensions/annuities_centre/annuities-calculator