Pensions

(asked on 25th October 2022) - View Source

Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, in what circumstances a man's pension that is subject to a Section 32 buyout policy will not pay out until the age of 65; and for what reasons there are restrictions on pensions subject to a buyout policy.


Answered by
Laura Trott Portrait
Laura Trott
Chief Secretary to the Treasury
This question was answered on 31st October 2022

A Section 32 buy-out policy is an individual contract between an individual and usually an insurance company, purchased using funds transferred from an occupational pension scheme.

Such a contract can and may pay out before the age of 65 for a man. However, a Section 32 policy may contain a Guaranteed Minimum Pension (GMP), and where it does, it must, as a minimum, pay a GMP from age 65 for a man or 60 for a woman, regardless of investment performance. Where there are insufficient funds to pay additional benefits, a Section 32 policy may therefore pay out only the GMP from these ages. This is a valuable guarantee, as it means that a person’s retirement income cannot decline below the amount of the GMP.

Reticulating Splines