Section 32 query

Your_Hero

What exactly does the letter say? Be more specific please. Take your time and type up the key information if you really want help or at least to decipher what the letter is saying.

peterth125

As stated in my opening post it is a section 32 policy which will pay out my GMP even though the fund has not reached the amount needed to do so.


The letter today is just a standard one stating" the current value of your pension fund is £33093.00"


It then goes on to tell me what action to take "shop around for retirement options or 6 weeks before your retirement date (Dec 8th 2014) we will write again to confirm the options available from ourselves "


As asked in my original post can I forgo the GMP and just buy an annuity and a small lump sum ?


thanks for reading

kidmugsy

peterth125 wrote: »

I do not really need the income as have several other pensions which I am already drawing plus my OAP starting in Dec.

In which case by far the best value for you might well be to draw your S32 pension on schedule and defer your State Retirement Pension, taking your reward as extra pension when you do start it.
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/299286/dwp024-apr-14.pdf

Even deferring it for less than a year might (you'd need to do the arithmetic) save you a useful amount in income tax, depending on the size of your various pensions.

ADDITION: If you wanted your reward as a lump sum, you'd have to defer your SRP for a year or more, but you can take your reward as extra pension without having to defer for as long as that.

xylophone

Have you obtained a state pension forecast?

peterth125

Yes sent away for that weeks ago and still waiting !

peterth125

Eventually got my state pension forecast.
48 qualifying years worth £113.10per week
Estimate additional state pension £38.86 per week


So if I am understanding correct I may lose some of the additional state pension because I was contracted out from 1987 to 1991.


Can anyone confirm this for me please ?

greenglide

No - the contracted out deduction has already been taken into account. This should not be confused with the "rebate derived amount" which applies only to the calculation of the new rules starting amount for people with a state pension date after 5/4/2016.

So you will get the whole amount.

peterth125

So even if I transfer my section 32 to another company in order to take a lump sum and a smaller monthly payment and give up my GMP I will not lose anything from my additional state pension. Sorry for all the questions but I am very confused about what step to take next

xylophone

Have a look at this thread https://forums.moneysavingexpert.com/discussion/1089865

particularly post 8 and post 20.

You will notice that in post 8, the poster gives the amount paid into the S32 in 1989 as £4970.59 - at that stage, the part of that relating to GMP was £345.28.

If you look at your policy document what does it say?

As you are proposing transferring a S32, you'll be required by the receiving scheme to consult an IFA? Might it be a good idea to find one now? http://www.unbiased.co.uk/