transfer pension

[io62kg]

i am 60 and redundant. i have paid into a company pension for 20 years and will not receive early retirement because of the financial situation. i have been advised (a) that i can transfer it to a type of deposit account, (b) the returns are better, (c) there is little risk, (d) i can draw on it now. is this correct ?

 

[Dave Vanian]

You'll need to give a bit more information.

Have you been offered a Buy Out Bond (sometimes known as a Personal Retirement Bond)?

When you say "the returns are better", what are you comparing them to? Better than what?

Is it your wish to draw your lump sum and retirement income now?

 

[dillage]

You may transfer to a Buy Out Bond (aka Personal Retirement Bond) which will allow you chose how you wish to invest the fund. Whether this is better or worse in terms of performance depends on the investment decisions you make. The returns and risk all depend on the investment choices.
If you invest in a Buy Out Bond. Your retirement date will be the same as the scheme transferred from so this will not allow you take the benefits early. My advice is dont transfer anything without getting independent financial advice (preferably fee based advice) as it may not be in your interest to transfer if, for example, the transfer value isnt favourable.

 

[Baracuda]

If you invest in a Buy Out Bond. Your retirement date will be the same as the scheme transferred from so this will not allow you take the benefits early. My advice is dont transfer anything without getting independent financial advice (preferably fee based advice) as it may not be in your interest to transfer if, for example, the transfer value isnt favourable.

Hi dillage

Perhaps I am reading your post incorrectly but it reads to me that if a person transfer's to a BOB the retirement age would still be the same as the original scheme i.e. 65.

The main advantage of a BOB is that it allows a person to claim benefits from age 50 and they are not bound by the original scheme's retirement age rule.

 

[dillage]

Hi Baracuda,


Sorry I can see why you picked up my post as you did... the dangers of not re-reading what you have written!

Yes you are right you can take the benefits early but What I meant was you cannot get your max tax free lump sum as your NRA stays as 60/65 (whichever is applicable).

In the original post he mentions having 20 years service which would entitle him to 1.5 times his "final salary" but this would be reduced if benefits are taken before 60.