wife cannot take lump sum from pension

bootneck51

My Wife has just turned sixty,she was with nat west bank for 26 years,and was persuaded to transfer her pension in approx 1991 to the PEARL she has recieved no bonuses to her plan.
she has now been told that there is £46.000 in the plan and it is not enough to convert some of this to cash.Please could someone offer advice,is it possible to convert some to cash??

dunstonh

is it possible to convert some to cash??

Yes but it will need transferring from a Section 32 buy out bond (freedom bond as Pearl call it) to a personal pension.

It is also possible that financially its best not to transfer it. Some Pearl Freedom bonds have guaranteed annuity rates and the fact no Pension Commencement Lump sum is available would suggest there is a guaranteed minimum pension which the fund value is incapable of meeting. So, Pearl have to pay the shortfall. If she transferred, that would be lost.

She should see a local IFA to compare the options of the open market with lump sum available vs the Pearl plan.

Cautious_Investor_3

dunstonh wrote: »

Yes but it will need transferring from a Section 21 buy out bond (freedom bond as Pearl call it) to a personal pension.

It is also possible that financially its best not to transfer it. Some Pearl Freedom bonds have guaranteed annuity rates and the fact no Pension Commencement Lump sum is available would suggest there is a guaranteed minimum pension which the fund value is incapable of meeting. So, Pearl have to pay the shortfall. If she transferred, that would be lost.

She should see a local IFA to compare the options of the open market with lump sum available vs the Pearl plan.

Hi

I couldn't agree more.

Whilst the fact that there may be no initial tax free lump sum is initially disapointing the GMP may be very attractive compared to the alternative of buying an Annuity on the open market.

I'd concur that you need to seek advice from a local IFA but be prepared to pay an initial fee for the advice. If you were definitely buying an Annuity the IFA would normally get paid commission but in this case to guarantee impartial advice I'd suggest that a fee payable by you to be given advice on the GMP element might be the way to go.

The Cautious Investor