budget and section 32

billyboggins_2

How does the latest budget affect type 32 pension plans ? i am due to retire in June this year

dunstonh

Early indications are it doesnt change S32 plans directly. Although the options of what you can do will be different.

billyboggins_2

Thanks for your reply,do you think things will become clearer in time to make a decision before June this year ? i would be really p***ed off if i make the wrong decision which i then can't reverse

dunstonh

,do you think things will become clearer in time to make a decision before June this year ?

I think the consultation and final decisions will not be completed by June. However, the things left in the air as unknown or unclear are unlikely to be a major concern.

If your S32 has guarantees (GMP and/or GARs) then these still exist. The only real change is whether you feel transferring the pension and losing GMP/GARs to draw it down (either over a period or immediately) is a better option. All the other possible alternative options remain the same.

billyboggins_2

as i understand it the situation is that i am not able to transfer unless the new provider meets the GMP included in my current plan ,i would be happy to forego the GMP if i was able to get a lump sum now and a smaller pension than the GMP , my current pension pot has not grown sufficently to meet the GMP so my currnet provider (phoenix) would have to top it up

dunstonh

billyboggins wrote: »

as i understand it the situation is that i am not able to transfer unless the new provider meets the GMP included in my current plan ,i would be happy to forego the GMP if i was able to get a lump sum now and a smaller pension than the GMP , my current pension pot has not grown sufficently to meet the GMP so my currnet provider (phoenix) would have to top it up

You can transfer it and lose the GMP. That is one of the options that already exists.

billyboggins_2

i have always thought transferring out was not an option open to me as the new provider would not be able to meet the GMP ,i read this "
Transfers Between Section 32 And Personal Pension Contracts

• A Section 32 plan may be transferred to a Personal Pension but a Personal Pension generally has no need to transfer into a S32 as it has no GMP.
• If there is a GMP shortfall, see above, you may not be allowed to transfer the Section 32 Buy Out." from a previous thread

dunstonh

billyboggins wrote: »

i have always thought transferring out was not an option open to me as the new provider would not be able to meet the GMP ,i read this "
Transfers Between Section 32 And Personal Pension Contracts

• A Section 32 plan may be transferred to a Personal Pension but a Personal Pension generally has no need to transfer into a S32 as it has no GMP.
• If there is a GMP shortfall, see above, you may not be allowed to transfer the Section 32 Buy Out." from a previous thread

They dont have to meet the GMP if you transfer out. If you want the GMP retained, then they have to accept it. However, you can transfer and lose the GMP if you want.

Some providers will require an adviser to sign off on the transaction where that is the case and will not do it on a DIY basis.

billyboggins_2

ok thanks for that so my IFA should be able to make all the arrangements for a fee...what would be the ballpark % on £100 k ?

dunstonh

billyboggins wrote: »

ok thanks for that so my IFA should be able to make all the arrangements for a fee...what would be the ballpark % on £100 k ?

its a higher risk transaction but I would think something in the ballpark of £1500 would be about right (and it can be taken from the pension and alternative would be commission free)

billyboggins_2

thanks once again for your invaluable help