Personal Retirement Bonds
A personal retirement bond (PRB), also known as a buy out bond, is used by the trustees of a pension scheme to purchase retirement benefits for deferred members of the scheme. A PRB is a personal policy that the individual deferred member will receive. The value of the deferred members retained benefits in the purchasing scheme are transferred to the retirement bond.
PRB’s are used when members leave employment, leave the pension scheme or where there is a complete wind down of the pension scheme. A leaving member may decide to transfer his/her retained pension benefits into their own personal retirement bond.
The main advantage of PRB’s is that they allow the deferred member to make a complete break from their ex employers scheme. Also the PRB will usually provide for a wider investment choice than a typical employer pension scheme. Investment decisions can be made without any reference to scheme trustees.
Under revenue rules, you can retire early from a personal retirement bond from age 50. Your retirement benefits will include a tax free lump sum from the retained assets held within your retirement bond. You may take retirement benefits from your retirement bond, even though you may plan to continue to work to a later age.
If you have received leaver options from your pension scheme, or if you have retained pension assets with previous employers, call us to discuss your options.