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 Contracts only allow single, "one off", transfers into them and are therefore well suited to accept transfers from a company pension scheme.

Flexible

If you transfer your company benefits to a Section 32 Buy Out Policy you will have more control over your pension benefits as with a Stakeholder or Personal Pension but with some of the guarantees you may have had within your company scheme.

A Section 32 mirrors an occupational scheme and the maximum limits imposed on income and tax free cash entitlement as well as how they are calculated. Many people benefit from this additional flexibility, for example, tax free cash is often an important consideration when you plan for your retirement. However you may find there is a cost in mirroring some of the main scheme benefits, particularly in relation to guarantees.