Section 32 Buy-Out Pensions

Section 32 buy-out policies (sometimes referred to as pension transfer plans) were introduced so that occupational pension benefits could be transferred to a different provider without having to go into another occupational pension scheme.

Section 32 buy out pensions allow you to transfer your pension from previous company pensions in order for your occupational pension benefits to transfer to your own pension fund under your individual control. This allows you to choose your own pension funds, retirement and annuity options.

Popularity of Section 32 Buyout

They became less popular when personal pensions were introduced in 1988 but they are be useful for transfers from final salary or money purchase schemes as they remain under occupational rather than personal pension rules.

Section 32 Buyout Pension Transfers

If you have left a job where you were a member of a company pension scheme also known as an occupational pension scheme, it’s likely that you will have a pension that is payable when you reach retirement age.

You can leave your pension benefits in your previous employers scheme where you have limited influence or you can take a pension transfer and move your pension fund into a Section 32 buy out policy.

By transferring your pension fund into a section 32 buy out you are able to take control of your pension rather than leave it under the control of the trustees of your former employers pension scheme.

Advantages of a section 32 policy

  • A section 32 pension allows their pension fund and benefit from company pension fund into your own pension plan.
  • You control your own pension fund.
  • A section 32 can be tailored to your individual needs for example you may be able to select your own retirement age and how your pension is taken when you retire.
  • You have a range of investment fund options to select from with your pension transfer.
  • If you would like some help in either considering transferring your pension to a section 32 buy out or reviewing an existing section 32 bond, please complete the short enquiry form.

Many people benefit from the additional flexibility that comes with a section 32 buy-out policy however unlike a personal pension they can only accept a one off single transfer. No further contributions can be made into the plan.

Money purchase scheme

Once set up, it is a money purchase scheme which can be on a unit linked or with profit basis. The fund can be taken as a tax free lump sum and pension. Benefits can start between the ages of 55 and 75.

It is always a good idea to take financial advice before considering transferring a pension as there may be transfer penalties incurred.

Get Expert Help with your Section 32 Buyout Pension

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