Aegon Section 32 pensions

Madrick

I am almost 60 and looking at early retirement.

I have a Trustee Proposed S32 with Aegon, from when I moved to my current employer. 

This was an old pension from previous employer from contracting out of serps.

It was around £25k, but over the last 17 years has grown to £49k.
But I am not allowed to make any contributions to it.

Is there something special or specific about these section 32 pensions?

Can this be moved to drawdown in the near future, as I intend to use this first, to (whilst not working) bridge the gap until I take my existing employers DC pension at 65? 

Marcon

Madrick said:

I am almost 60 and looking at early retirement.

I have a Trustee Proposed S32 with Aegon, from when I moved to my current employer. 

This was an old pension from previous employer from contracting out of serps.

It was around £25k, but over the last 17 years has grown to £49k.
But I am not allowed to make any contributions to it.

Is there something special or specific about these section 32 pensions?

Can this be moved to drawdown in the near future, as I intend to use this first, to (whilst not working) bridge the gap until I take my existing employers DC pension at 65? 

If you look at Aegon's website they have plenty of info about S32 contracts: https://www.aegon.co.uk/support/faq/pension-technical/different-types-of-pension-schemes.html (scroll down to 'Buyout policies - S32).

If you read the information you have been sent (or give them a call), they'll be able to confirm your options.

Madrick

Thanks 👍

I suppose I should have looked there first 😂

DairyQueen

OP: You may wish to check-out this thread and others regarding S32 buy-outs.

If there is a GMP element it's possible that the revaluation rate is such that it will pay-out a very generous annuity.

The linked thread concerned valuation of an S32 for LTA purposes but mentions values. Mr DQ's S32 CETV of £37k at age 63 will provide an annuity of £3,115 p.a. (plus 50% widows) at age 65. In addition, as the policy retirement age was 63, he receives an additional two years GMP-equivalent (£2,647 at age 63 and £2,872 at age 64).

There is no indexation but the deal is pretty good given the current pathetic annuity rates.

Your policy may be quite different but worth checking if (like Mr DQ) you are considering transferring. Thanks to this forum we were able to ask the policy holder (Aviva) the right questions and discovered just what a good deal he would have foregone.

dunstonh

Is there something special or specific about these section 32 pensions?

There is something specific about all the different pension types.

Can this be moved to drawdown in the near future,

Not directly but it may be able to indirectly.   Whether it si the right thing to do though will depend on the terms of the buy out bond.  For example, is there any GMP or GARs, guaranteed growth rates or protected tax free cash entitlement.

Madrick

Thanks both

I need to find out the full story behind this policy and what it could achieve
I feel a long chat with Aegon over the coming weeks. 

If it is any way similar to the ones mentioned above, it may well be worth leaving this to full term... 🤔

I wouldn't be touching anything until Feb/Mar next year anyway...