Transfer a section 32

llahets

I've a section 32 buyout plan worth approx 10k with AEGON. I can't access it online as it isn't allowed for that type of plan and I can't set up a beneficiary either. Therefore I want to transfer it to an existing pension. I've been told by AEGON that if I do I'll lose my tax free lump sum protection. What does that mean in layman's terms please? Will I lose money or just the option to take a lump sum? Thanks in advance.

xylophone

Some pension plans (including some S32s) have protection of a higher than 25% PCLS.

Is this the case with your Aegon S32?

If so, this is what is meant.

See https://www.aegon.co.uk/support/faq/pension-technical/ordinary-tax-free-cash-protection.html

And are you sure of the value of your policy?

Does it include a GMP?

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/495377/pension-benefits-with-a-guarantee-factsheet-jan-2016.pdf

llahets

I've no idea what any of that means sorry. I simply just want to know if my pension will take a hit or if it just means I can't take a lump sum. I guess I'll have to find an advisor.

dunstonh

and I can't set up a beneficiary either

You cannot with most pensions.  To do so would create IHT issues.  Instead you use an expression of wish.

Therefore I want to transfer it to an existing pension.

You havent mentioned any justification to support your "therefore"

. I've been told by AEGON that if I do I'll lose my tax free lump sum protection. What does that mean in layman's terms please?

Section 32s automatically qualified for transitional relief at A day (April 2006) when 25% tax free cash was aligned across pensions.     Any S32 that had greater than 25% entitlement at that point automatically qualified to retain that higher figure on the amount built up until 2006.

In other words, you have a greater than 25% tax free cash entitlement.

? Will I lose money or just the option to take a lump sum? 

You will lose the transitional relief and revert to 25%.

llahets

Thank you 

xylophone

I've no idea what any of that means sorry. I simply just want to know if my pension will take a hit or if it just means I can't take a lump sum. 

Did you bother to read the FAQ on "Protected tax free cash " in the  first link (from AEGON) I posted above? 

PaulCooper

Just to add something to this, I had a section 32 pension, that I took out in 1985, unknown to me for several decades (until learning more on this site) it had a GAR ---Guaranteed Annuity Rate of something like 9.8%. So the investment I made in 1985 of £1100 is now paying me a pension of >£5k pa-------- a very good return in my book.
Simply ask Aegon if there is a GAR as part of the terms of the pension and any other questions prompted by the other answers above, you might find it's an extremely valuable asset left where it is
Paul

dunstonh

Simply ask Aegon if there is a GAR as part of the terms of the pension and any other questions prompted by the other answers above, you might find it's an extremely valuable asset left where it is

You are right.  A lot of S32s have GARs or GMPs in addition to transitional relief on tax free cash.   However, rather than just ask about a GAR, the better question to ask is whether there are any safeguarded benefits, protection tax free cash or any other form of guarantee.

If you ask just about one type of guarantee, they will answer that question.   By asking the wider questions, they will have to tell you about all the guarantees that there may be.