Section 32 Pension Policy after April 2015

BIKER77

I wonder if anyone knows what will happen to Section 32 Pension Policies with GMP after next April 2015, as you know these policies usually have age limits for when one can take their pensions ( like 65yrs for men & 60 yrs for women etc). With GMP there are usually quite high bonuses so would these bonuses be lost and just the main pension be paid if they can be accessed after next April 2015 at 55 yrs onwards...Are section 32's different to ordinary pensions from these new laws from next April 2015?.
Thanks again for your help. Almost forgot this is for my wife who has a section 32 and will be 60 yrs old next July 2o15.

greenglide

And from April 2016 there will be no GMP with the advent of the Single Tier Pension changes to State Pension.

Since DWP will no longer inflation proof part (or all) of the GMP depending whether it is pre or post 88 GMP what will happen to these?

dunstonh

as you know these policies usually have age limits for when one can take their pensions ( like 65yrs for men & 60 yrs for women etc).

Only if the fund does not have sufficient value to meet the GMP. However, you can transfer out and give up the GMP if you want a different age.

Are section 32's different to ordinary pensions from these new laws from next April 2015?.

April 2015 isnt changing anything in respect of accumulation. it is just allowing a couple more options on decumulation. However, Providers are under no obligation to offer the new options. You are very unlikely to see the new options applied to legacy S32 plans.

BIKER77

Thanks for your reply....


When you said....Only if the fund does not have sufficient value to meet the GMP. However, you can transfer out and give up the GMP if you want a different age.


What happens if my wife reaches her 60th birthday and her section 32 hasn't made the sufficient valule, its dated for her 60th birthday to take her pension will the GMP be protected as she will have reached 60 etc...
Thanks again for your help...

dunstonh

What happens if my wife reaches her 60th birthday and her section 32 hasn't made the sufficient valule, its dated for her 60th birthday to take her pension will the GMP be protected as she will have reached 60 etc..

If the fund is not sufficient to equal or exceed the GMP then the insurer suffers the loss and has to meet the GMP requirement via it's own in house annuity.

BIKER77

Thanks....totally understand where we stand now....

wallhaz

Surely this goes against the governments plans not to force people to take annuities.

xylophone

Has your wife received a statement showing pre 88 and post 88 GMP and any excess?

dunstonh

Surely this goes against the governments plans not to force people to take annuities.

No as they can transfer it to a personal pension to give up the GMP.

They didnt have to buy an annuity before the Govt adjusted the options.

BIKER77

Has your wife received a statement showing pre 88 and post 88 GMP and any excess?


We have both sat down and had a better look over these section 32's as we now find the following;


The first section 32 was set up on 22-11-1989 and there was 6807 put into the policy which 2450 were my wife contributions. The guaranteed benefit for July 2015 when my wife is 60yrs is 31504 ( on the phone to Aviva last week it was at 35376). The policy states a GMP of 4470 per year and a increase every year of 5% which starts on 01-08-2016, also will pay for a minimum of 5 years even if death came .


Then in June 2000 my wife received a redress of £18369 which could not be put in to the first policy so another one had to be opened . This has a benefit of 34975 in July 2015 which last week was at 32493..(no GMP on this one)


Aviva state that both policies must be taken together and this is what we were told last year on the phone ( July 2013) and a letter of their projection of benefits for my wife both polices at July 2015..
Will begin at 60yrs, be paid monthly instalments for the rest of her life, continue for a min of 5 years even if you die before this.


Fund retirement of both together will be 5710 per year or


tax free lump sum of 20600 and a guaranteed minimum pension of 4470.44 per year...


Could you please tell us if everything appears ok with these 2 polices


Many thanks for your help and your time, biker77..

xylophone

Is Aviva saying that the whole of the GMP will be increased by 5% per annum for at least five years?

Has your wife applied for a state pension statement?
https://www.gov.uk/state-pension-statement

Might she benefit from discussing her options with an Independent Financial Adviser?
http://www.unbiased.co.uk/

I found this - an advert but might be of interest to read?
http://www.pensionsandannuities.co.uk/GMPInsurers.htm