Buy Out Bond

buy out bond pension Dec 14, 2021

Pension Terminology

Risk Level – Each fund has a risk level attached to it which is a guide how risky the fund is. A higher number means a higher risk fund and a lower number means a lower risk fund. A higher risk fund will give you more potential for investment growth. The scale is generally 1 to 7.

Buy Out Bond – A type of retirement product also known as a Personal Retirement Bond

Contributions – These are the payments you pay into the pensions fund. In the case of a Buy out Bond, the only contribution allowed is the transfer from your previous employment. No further contributions are allowed to a Buy out Bond.

What is a Buy Out Bond?

A Buy Out Bond (BOB) which can also be known as a Personal Retirement Bond, is policy that is set up by trustees of a pension scheme to provide retirement benefits for a former member of the scheme. It basically means that if you leave a pension scheme, you can bring your pension benefits with you and take control over it by having the value of your fund invested in a BOB. A Buy out Bond will also allow you access to your retirement benefits from the age of 50.

Who can get a Buy Out Bond?

If you're planning to leave the company you currently work for, and you are a member of the group pension plan, a BOB could be a great option for you. A BOB will also be suitable if you decide to leave a company pension scheme for any other reason, or if the scheme is winding down.

How does it work?

When you've decided to set up a Buy Out Bond, the next step is choosing how best to invest the money you have. It can be invested into a range of investment funds. You'll have access to a wide range of different assets, and varying degrees of risk, so you'll be sure to find a solution that works for you.

How do I get a Buy Out Bond?

Buy Out Bonds are available from most Life companies, and a broker would be able to give advice on what options are available.


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