Aegon s.32 Buyout Plan

Marcon

https://forums.moneysavingexpert.com/discussion/comment/82116690#Comment_82116690

Ten out of ten for honesty!

WitsEnd101

https://forums.moneysavingexpert.com/discussion/comment/82116641#Comment_82116641

Thanks Marcon, that is really useful.

WitsEnd101

https://forums.moneysavingexpert.com/discussion/comment/82116690#Comment_82116690

Well that's super encouraging.

WitsEnd101

I have eventually had confirmation from Aegon that my s32 Buyout policy does not have any Safeguarded Benefits after taking some suggestions from above posts. I have subsequently received the following response from Aegon on my options:

The following retirement options, allowing you to retain protected tax-free cash (PTFC) may be available:

• PTFC + annuity (with our partner L&G or via Open Market Option)
• PTFC + flexi access drawdown (FAD) with Aegon Retirement Choices (ARC). Under this option protected tax-free cash will be paid from buyout policy and new policy will be set up with ARC from available residual.
• For FAD option, an IFA must be involved in transfer.

They also added -

You could also preserve tax-free cash protection by transferring [full policy proceeds] to section 32 contract equivalent elsewhere. Additional retirement options may be available with another provider. Unfortunately, we do not have a process in place to pay the protected tax-free cash and transfer residual directly to an external drawdown product (with different provider). In first instance any residual will have to be transferred to Aegon Retirement Choices (ARC), where it could subsequently be transferred to an external drawdown (see second bullet point).

I can confirm that current buyout arrangement does not support drawdown facility.

Your suggested option of Aegon paying protected tax-free cash and moving residual to an alternative provider is available, as long as residual [after protected tax-free cash
is paid] is annuitized.

So it looks like I have taken this one as far as I can. Any suggestions?

DRS1

What happened to the fixed term annuity idea from page 3? Did they say that it did not qualify as an annuity?

WitsEnd101

https://forums.moneysavingexpert.com/discussion/comment/82130993#Comment_82130993

Yes, the FTA is my backstop option. Ideally for a 1 year duration with the lowest amount of income I can draw over that period. It does sound like a loophole though.

DRS1

https://forums.moneysavingexpert.com/discussion/comment/82131108#Comment_82131108

A 1 year FTA does sound like you are taking the Mickey.

You can get a maturity amount with an FTA. I just assumed you would buy another FTA or lifetime annuity with that money but can you transfer it to a FAD scheme? If so it sounds like a way to get to where you want without the financial adviser intervention.

FatherAbraham

https://forums.moneysavingexpert.com/discussion/comment/82130945#Comment_82130945

You seem not to want to take the annuity.

So you could take the annuity, then use the income stream to permit you to borrow a capital sum. That way, you convert an unwanted income into a wanted lump sum.

WitsEnd101

https://forums.moneysavingexpert.com/discussion/comment/82131120#Comment_82131120

My understanding is that the maturity value at the end of the term can be moved to FAD account in my SIPP. This is why I think there's a loophole.

DRS1

https://forums.moneysavingexpert.com/discussion/comment/82131243#Comment_82131243

Well only a loophole for what seems an arbitrary requirement by Aegon - if you don't have safeguarded benefits in the s32 scheme then there is no legal requirement for the financial advice. It is just something they want for you to transfer to something on their ARC platform.

Have you asked them if an FTA meets the annuity option?

If it does then the only thing to consider is the MPAA which would be triggered by an FTA. Do you care about that?