Frozen Pearl pensions

welsh_worrier

Hubby has several frozen pensions with Pearl.He also has a freedom bond.
We are in great financial difficulties at the moment.He is self employed and 57 years old.Is it possible to release cash from these.I don`t work as i am carer for my grown up son.

dunstonh

The Freedom Bond is a section 32 buy out bond and not a personal pension. Most of these from Pearl have guaranteed minimum pensions and guaranteed annuity rate attached to them. Pearl returns have no chance of ever meeting these minimum guarantee figures. Early commencement (usually by transfer to a personal pension) would usually see a massive loss take place. If you try and commence with Pearl they usually refuse tax free cash on the basis that the returns havent met the guarantees. However, every policy is different so there is no way for anyone to tell without getting an IFA to review the policy.

Pearl retirement annuity contracts tend to come with decent guaranteed annuity rates at about 40% higher than open market options. These commence at age 60 and increase in 5 year steps (dont expect any change at age 61, 62, 63 and 64 though).

Pearl V1 through to V5 plans can be taken early as can the NPI and Pearl stakeholders. You cannot do income drawdown with Pearl so if you are only looking to access the 25% tax free cash and not the income, you would not be able to do it with Pearl.

welsh_worrier

The freedom bond has expected retirement date as 2015 at which time he would be 65 .The nominal capital sum as at 2005 is 6,151.00 with bonus of 7,302.55 making 13,45355.If this could be transferred to pension do you think he could get a lump sum now and if so how much is he likely to get.
We really are in difficulty and as we have lost several male members of family on either side of the family at a young age we feel that we would be better off thinking of now ie keeping a roof over our heads.

dunstonh

The freedom bond can be transferred to a personal pension or SIPP and then commenced allowing access to 25% of the value. However, that may be a major mistake.

Look on the paperwork for something called Guaranteed Minimum Pension (GMP). This could be massively above the nominal value. I have quite a few clients with Freedom Bonds (4 of my introducers are ex Pearl staff so I get to see a lot of Pearl policies) and there are some Freedom bonds which have guarnateed minimum incomes which are 4-5 times higher than the cash value would provide if transferred out. You lose the guarantees on transfer.

That said, there are some that have no guarantees and are fine to move. It really is an individual scenario where the facts need to be known and not one where you can say generically yes its this or that.

If we assume that the £13,453 is transferred to a personal pension then you could draw 25% of it giving £3,363 as a lump sum.

lisyloo

Could you tell us more about your financial difficulties as someone may be able to make suggestions.
I know you asked about pensions but MSErs may be able to offer help on the wider problem.