Freedom Bond wiith profits pension with Pearl

Casa_125

Hello,
I have a Freedom Bond with profits policy that is with Pearl.
It is just sitting collecting dust, no bonuses added for at least 8 years.
I transferred my old company pension into it in approx 1988 and it started off with good annual bonuses. I could take it at age 60 (10 years away) but not sure if I should move it somewhere else? The pot is £50k.
Anyone heard of these, or got one? Thanks

dunstonh

It is just sitting collecting dust, no bonuses added for at least 8 years.

Most (but not all) of Pearl's plans have stopped paying annual bonuses and taken to paying on the terminal bonus only. That said, your plan is a section 32 buy out bond and the more likely reason is that the GMP (guaranteed minimum pension) is way above what the plan is ever likely to achieve so no point adding much in the way of bonuses as the guarantees are where the real value is. Also, some also have the possibility to pay greater than 25% lump sum (which is lost if you transfer it to a PPP/SHP)

It would need a proper analysis (almost to an equivalent of an occupational pension transfer standard) to see if its better to leave or transfer. Although with some plans, it can be pretty obvious from the value, example projections and GMP as to the real value of the plan (or not).

jimmy44

Hello,
I also have a with profits Pearl Freedom Bond since 1990, I have also had no profits added for a number of years. I contacted Pearl a few days ago and made some enquiries into getting an estimate into lifting the bond when I reached 50,55 & 60 years of age instead of the 65 which they put on the bond when I took it out. I did not get much of an answer as all their systems were down, but was promised a full written answer in ten days time (still waiting). The person I was speaking to gave me little faith as to whether this lifting early was possible.
I will also add at this point that the funds that had been transferred into this bond came from an occupational scheme from a company I worked for prior to 1990, but closed down at this time that is why I transferred. I also took out a personal pension with them at this time, but I was one of the many who was wrongly advised and subsequently transferred into my current works scheme with the civil service.
The reason I have asked this question to Pearl is that I have recently suffered Ill health and do not realistically expect being able to work until I am 65.
Can anybody help in letting me know if I can actually take the funds earlier than the 65 that they put on the bond when it was taken out?

dunstonh

Can anybody help in letting me know if I can actually take the funds earlier than the 65 that they put on the bond when it was taken out?

Yes you can. However, subject to the GMP, you may not be able to take it via the existing S32 buy out bond but need to transfer it to a personal pension first (known as an IVPPPP - immediate vesting personal pension). This will effectively remove the GMP (which could be a costly error but may be justifiable if you believe you wont benefit if left).

Some S32 buy out bonds also have guaranteed annuity rates (GARs). This would be lost on transfer.

Finally, S32 buy out bonds got automatic HMRC transitional protection in April 2006 (A day) which means that if they qualified for higher tax free cash than 25%, then they can keep that as long as you take the benefits from that plan. On transfer, that benefit is lost and reverts to 25%.

A local IFA should be able to help run through all this with you. Pearl will not because they are not authorised to do so. They can only give you factual information about that plan. Not options that exist with other plans and providers.