We'd like to remind Forumites to please avoid political debate on the Forum... Read More »
We're aware that some users are experiencing technical issues which the team are working to resolve. See the Community Noticeboard for more info. Thank you for your patience.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Section 32 buyout policy - changes that stop ability to drawdown on enhanced tax benefit
Options
Sunflowerwine
Posts: 1 Newbie
I have a section 32 buyout pension with Aegon which has enhanced benefits. I received a retirement quote on 27 May 25 with three options, the option I wanted was to collect the protected enhanced tax free lump sum and then move the balance into a flexible drawdown. I spoke with them today to arrange this and was told this option is not longer available as HMRC changed the pension regulations on this type of pension on 29 May 25. The only two options available now is to 1) take the pension in total, losing the enhanced benefit of a 34.7% tax free lump sum or 2) retain the enhanced protected tax-free lump sum and transfer the balance to a different provider that must then be invested into an annuity. Has anyone experienced the same? Surely I should have been told of the changes by the provider in good time to give me the choice?
0
Comments
-
29th May seems like an odd day for a change to the law. Did they confirm this in writing? If not maybe call again and see if you get the same story and then ask for written confirmation.1
-
Option 2 sounds like a tax free lump sum and open market option where you transfer the balance to another provider. That said my understanding is that the OMO transfer can be used to buy an annuity, put into drawdown etc so might be a suitable option anyway.0
-
I think I can guess where the date came from - 29 May is when the last Guidance Newsletter was issued: https://www.gov.uk/government/publications/pensions-schemes-newsletter-170-may-2025/newsletter-170-may-2025DRS1 said:29th May seems like an odd day for a change to the law. Did they confirm this in writing? If not maybe call again and see if you get the same story and then ask for written confirmation.
How that ties in with what OP is being told is another matter. Your suggestion of calling again is a good one - be interesting to see if the same info is given.Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!2 -
Hi just contacted Aegon and got the same story, did you find a solution?0
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 350.9K Banking & Borrowing
- 253.1K Reduce Debt & Boost Income
- 453.5K Spending & Discounts
- 243.9K Work, Benefits & Business
- 598.7K Mortgages, Homes & Bills
- 176.9K Life & Family
- 257.2K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.6K Read-Only Boards