What is a Buy Out Bond?

 You can consolidate your pension benefits from the various jobs you may have held throughout your career into Buy Out Bonds, which you own and control. The value of benefits you may have built up in a former employer’s pension scheme are calculated and this ‘transfer value’ is then paid into your Buy Out Bond.Once in the Buy Out Bond, the ‘transfer value’ is then invested in a fund or series of funds. Because you control the Buy Out Bond, you choose how to invest this money and when you can draw on it. This level of control is a great benefit of a Buy Out Bond. If you leave your pension benefits in former employers’ schemes you have no control over how the funds are invested. Buy Out Bonds are also a flexible product. You can transfer the funds built up in your Buy Out Bond to another Buy Out Bond with a different life insurance company at any stage or you can transfer them into another employer pension scheme, if you join one at a later date. If you die before drawing on the Buy Out Bond, the value of the funds in your Buy Out Bond at that stage will be paid to your estate, for the benefit of your next of kin.