Transfer to a Section 32 Buy Out Policy

What is a Section 32 Buy Out Policy

A Section 32 Buy Out Policy is similar to a Personal Pension Policy. However, it differs slightly as it is designed to have the same Inland Revenue rules as a company pension although still have the individual control like a personal plan.

Unlike a Personal Pension Policy you cannot contribute a regular monthly premium into the plan. Section 32's only allow single, "one off", transfers into them and are therefore well suited to accept transfers from a company pension scheme. The vast majority of insurance companies will offer Section 32 Buy Out Policies.

Flexible

If you transfer your company benefits to a Buy Out Policy you will have more control over your pension benefits and as with a Personal Pension you are able to take a Tax Free Cash amount when you retire.

A Section 32 mirrors an occupational scheme and the maximum limits imposed and how they are calculated. Many clients will benefit from this additional flexibility as, for example, tax free cash is often an important consideration when you plan for your retirement. Due to their design, linking them closely with company schemes, an insurance company must provide any Guaranteed Minimum Pension benefits in the same way as a company scheme.