Non Reserve Pot advice

oshb5

Hi

Iv found out a few months ago that I have a Aegon GMP 32 Buyout policy from 1994. It had been paid in to since 1995 Then I finished at this company and it was transfers out? (Not sure what this means) Which I have all the figures from on a 1995 yearly report
Apparently there is now somewhere in the region of £51 k being 23k as the GMP part and 28k as the Non reserve pot.
And was told the 28 is to do with what I would like But if it was to be played with then it would all have to be removed not just a portion and the rest left.
So thought I would ask in here if anyone has any suggestions as to what to do with the said pot.
The Guy at Aegon mentioned a FA but iv never dealt with anyone like that so would not know what sort of questions to ask or what to look for in the way of a FA?

Regards Osh

Your_Hero

oshb5 wrote: »

Hi

Iv found out a few months ago that I have a Aegon GMP 32 Buyout policy from 1994. It had been paid in to since 1995 Then I finished at this company and it was transfers out? (Not sure what this means) Which I have all the figures from on a 1995 yearly report
Apparently there is now somewhere in the region of £51 k being 23k as the GMP part and 28k as the Non reserve pot.
And was told the 28 is to do with what I would like But if it was to be played with then it would all have to be removed not just a portion and the rest left.
So thought I would ask in here if anyone has any suggestions as to what to do with the said pot.
The Guy at Aegon mentioned a FA but iv never dealt with anyone like that so would not know what sort of questions to ask or what to look for in the way of a FA?

Regards Osh

It is not as simple as this.

The first priority of a S32 is to secure your GMP. Is there a GMP shortfall?

There usually is and so your Non-GMP element will be used to cover this shortfall first. If there is still a shortfall after this, then AEGON will meet the shortfall from their own money.

oshb5

Your_Hero wrote: »

It is not as simple as this.

The first priority of a S32 is to secure your GMP. Is there a GMP shortfall?
There usually is and so your Non-GMP element will be used to cover this shortfall first. If there is still a shortfall after this, then AEGON will meet the shortfall from their own money.

Hi Thank you for the info As its good that I can take it and learn from it and if I see anyone in the same boat one day then could pass it on..

More info on the pension, This being that My pension although being a GMP of type 32 Buyout Apparently mine was taken out at a time when the two pots where actually split. So at 65 giving a GMP of £23.619
Which according to the FA will give a annual income of £6.843
Plus a seperate Non Reserve pot of £28.389
Which ciould give a tax free lump sum now of £7.097
and a annual income of £991 if left where it was.

But have said there is 3 other things to look at and has asked for all my medical information and is going to have a look at what is achievable ,
I was asked another couple of questions these being
1/ Would I want the yearly payments to still carry on to my spouse in the event of my passing
2/ Would I rather have say a £100 per month now with no growth or say £66 now with growth but I would not see any gain till after at least 5 years.?
Oh I think No 3/ was if I wanted to take the annual payment out monthly, quarterly, 6 monthly or yearly.. I think

These questions just appertained to the 28k pot and whether its best to do one of the following with it That be to either take the 25% lump sum tax free and reinvest the remainder or move and reinvest it all or just leave it where it is at the moment..

Does any of this sound about right or make sense to any of you?

Osh

Your_Hero

What does your latest statement say re GMP?

And have you read the policy T&Cs?

greenglide

But have said there is 3 other things to look at and has asked for all my medical information and is going to have a look at what is achievable ,
I was asked another couple of questions these being
1/ Would I want the yearly payments to still carry on to my spouse in the event of my passing
2/ Would I rather have say a £100 per month now with no growth or say £66 now with growth but I would not see any gain till after at least 5 years.?
Oh I think No 3/ was if I wanted to take the annual payment out monthly, quarterly, 6 monthly or yearly.. I think

These questions just appertained to the 28k pot and whether its best to do one of the following with it That be to either take the 25% lump sum tax free and reinvest the remainder or move and reinvest it all or just leave it where it is at the moment..

So are they options for an annuity? They sound like the standard options.

If so you need to at least consider the open market option unless the has a Guaranteed Annuity Rate (GAR) which could be very valuable.

xylophone

Previously discussed here https://forums.moneysavingexpert.com/discussion/comment/67100404#Comment_67100404


And http://www.moneymarketing.co.uk/hold-fire-on-pensions/129362.article might be of interest.

oshb5

xylophone wrote: »

Previously discussed here
And http://www.moneymarketing.co.uk/hold-fire-on-pensions/129362.article might be of interest.

Hi in the link you sent me to I read the following with regards to the 32 buyout policy?
Under no circumstances should you trigger your guaranteed minimum pension before age 65 otherwise you will lose out. Interestingly and unusually, Scottish Equitable offers you the ability to access your unreserved fund today if you wish.
Could I ask what action is it that tiggers the above GMP before 65 please. Would one of the way be if you 25% of the Non Reserve fund and transferred the rest out or?

Once again thank you for all your help

regards Osh

oshb5

greenglide wrote: »

If so you need to at least consider the open market option unless the has a Guaranteed Annuity Rate (GAR) which could be very valuable.

Sorry if I sound thick but could you enplane what a GAR is please?

regards Osh

jamesd

A Guaranteed Annuity Rate is a usually highly valuable feature of older pension products that provides a fixed annuity rate.

Because of the time these were offered they typically pay out a lot more annuity income than current open market annuities, perhaps twice as much. This often makes it very unwise to do anything other than wait until the GAR is available then buy that product. There are often strict limits on when the GAR is available and even waiting too long can cause it to vanish.

It's vital to find out whether there are any GARs for old pensions and what the annuity products and rates offered for them are.

dunstonh

Under no circumstances should you trigger your guaranteed minimum pension before age 65 otherwise you will lose out. Interestingly and unusually, Scottish Equitable offers you the ability to access your unreserved fund today if you wish.

That link is wrong.

It is certainly important to consider the GMP but there are occasions where it is best advice to give up the GMP and arrange an alternative. Perhaps the link should so that in most cases it is not a good idea and its important to make sure that the alternatives are better.

xylophone

That link is wrong.

Remember that the article was addressing a particular set of circumstances. (See small print at the top of the article.)

"A review of a client's pension funds reveal how touching the funds before he is 65 would be a costly error
I have just been made redundant and social security want to know what pensions I can expect before it pays me any form of credit. I only have a few small pensions, not worth much, should I take them?"

As it happens, the OP is also in receipt of state benefits (see original thread) although that is not to say that the "advice" in the article would apply to him.

It seemed to me that the discussion of the non-reserved fund in the SE (Aegon) Section 32 would be of interest to the OP.

He has also been in discussion with Aegon (and a Financial Adviser, it seems) see

More info on the pension, This being that My pension although being a GMP of type 32 Buyout Apparently mine was taken out at a time when the two pots where actually split. So at 65 giving a GMP of £23.619
Which according to the FA will give a annual income of £6.843
Plus a seperate Non Reserve pot of £28.389
Which ciould give a tax free lump sum now of £7.097
and a annual income of £991 if left where it was.

It appears that his medical condition is also under
consideration.

has asked for all my medical information and is going to have a look at what is achievable ,