s32 pension

coolbawn

My Cousin now living in Australia is 65 in October and has just been notified that his pension is a s32 pension with guaranteed income. He needs desperately to obtain all this pension with Aviva as a lump sump but has been told this is not possible. He has been given two values one of 45000 approx and one at 65000 approx and he is not sure which applies.. Are there any possibilities of obtaining this pension as a lump sum such as transferring the pension to another fund and then cashing it in as a lump sum. Also if he does nothing before he is 65 will he be then tied into receiving the pension as a income rather than a lump sum.

jamesd

He would not be tied into receiving the money as income at age 65.

It's not possible to say reliably what the two values are without knowing more about how they are described. One guess is that 45000 is the current value of the investments in the pension pot and 65000 is the transfer value due to the higher value of the guaranteed benefits.

It is usually possible to receive such a pension as a lump sum after paying something between 1000 and 2000 to an independent financial adviser for advice. For a pension with a guarantee it is a legal requirement for the pension provider to obtain proof of advice having been obtained before allowing a transfer. The advice given doesn't have to be followed.

It is usually possible to take 25% of the pot value as a lump sum free of UK income tax. It is not required to take the remaining 75% at the same time and not required to take it a an annuity but some providers may not offer any option beyond taking it as an annuity. A transfer would be the usual way to remove the annuity requirement.

However, section 32 pensions can contain quite a wide range of things so it's hard to say with any accuracy just what he has with so little information.

dunstonh

He needs desperately to obtain all this pension with Aviva as a lump sump but has been told this is not possible.

Remember that this is not a personal pension but a section 32 buy out bond. There are key differences.

He has been given two values one of 45000 approx and one at 65000 approx and he is not sure which applies.

There is normally a current value and a surrender/transfer value.

Are there any possibilities of obtaining this pension as a lump sum such as transferring the pension to another fund and then cashing it in as a lump sum.

This pension was never designed to pay a lump sum and it is highly unlikely that option exists on this plan. So, it would require a transfer to another plan for that to happen.

Also if he does nothing before he is 65 will he be then tied into receiving the pension as a income rather than a lump sum.

That is not how it works. Whilst a number of guarantees a tied to age 65, it will not auto-convert to income at 65. It may stop receiving investment returns (some do, some dont) but it will sit there until they are given an instruction.

xylophone

Is your cousin expecting to receive a UK State Pension?

https://www.gov.uk/check-state-pension

http://www.pension-transfer-advice.com/html/article.php/zcid/2248/type/article/finance/S32_Buyout_Pension_Transfer

He will need to obtain advice from an IFA with the necessary permission for pension transfers/ international expertise.

Googling produced this, by way of example, but he can investigate for himself.

https://www.unbiased.co.uk/profile/financial-adviser/montfort-international-ltd-497610