Section 32 Bond

ryequeen

Hi I have a bond 32 - where my pension payments from a private company were invested many years ago and this was transferred to a Bond 32 with Prudential. I turned 60 last year and decided to defer my gmp (it was very small annual sum) and I wanted to take the fund value lump sum but Prudential have said that I can only take the lump sum if added together with my other current private pension does not exceed £30,000 is this correct - as I thought with the new Pension changes in Apr 15 I would be able to take the lump sum (25% tax free) and the rest taxable regrdless of the value?

xylophone

Do you mean that you took no benefits at all under the policy when it became payable?

Is Prudential telling you what is possible under current rules or what will be possible on or after 6 April?

ryequeen

I deferred the GMP as it was so little but the statement said the fund value was £28,000 now they are saying that as I have offer pensions the total put of them all can't exceed £30,000 so it seem I can't take any of the fund from Prudential, they re saying that I can't even after 6TH aPRIL 15

xylophone

I am still not sure what you mean.

You had an occupational pension.

The pension was transferred to a S32 buyout bond with the Prudential.

You are female so that your GMP became payable at 60.

The policy obliged Prudential to pay you at least your GMP when you reached 60.

You chose not to draw benefits from the policy( which has a CETV of £28,000?) last year when you became 60.

You cannot draw this as a lump sum under current triviality rules.

What do Prudential say are your options now and after 6 April?

Can you transfer out to another pension scheme or not?

Try the Pensions Advisory Service for assistance?

http://www.pensionsadvisoryservice.org.uk/about-pensions/pensions-basics/contract-based-schemes/buyout-policies

TH1878

ryequeen wrote: »

Hi I have a bond 32 - where my pension payments from a private company were invested many years ago and this was transferred to a Bond 32 with Prudential. I turned 60 last year and decided to defer my gmp (it was very small annual sum) and I wanted to take the fund value lump sum but Prudential have said that I can only take the lump sum if added together with my other current private pension does not exceed £30,000 is this correct - as I thought with the new Pension changes in Apr 15 I would be able to take the lump sum (25% tax free) and the rest taxable regrdless of the value?

Do you have a tax free cash entitlement greater than 25%? If you have, you can transfer it before 5th April and be able to preserve your enhanced entitlement as long as benefits are taken before October.

If you haven't got enhanced tax free cash, you should be able to take benefits with Prudential (after April) as a lump sum through UPFLS or transfer to another plan that offers Flexi-access drawdown if their systems don't allow it.

jamesd

Prudential are correct that the rules in place until 6 April 2015 do not allow you to take it all as a lump sum. This is because the limits are no more than £10,000 in an individual pension pot or alternatively no more than £30,000 in all pension pots combined, including the value of defined benefit pensions like final salary.

Starting on 6 April 2015 those limits are removed and there is no longer any limit at all on how big a pot can be or the total value of pensions that limits if you can take a lump sum. However, a pension firm is not required to update its products to offer what the new rules allow and for many older products it is likely that the changes won't happen. The usual solution in these cases is to transfer to a newer product that does allow the flexibility of the new rules.