Pension after my lifetime

TrainGeek1808 · 19 April 2015 at 6:21PM

Hi guys

I've been recently diagnosed with a life-limiting illness. I need some advice on the best way to deal with things going forward, particularly if I need to act now to change anything.

I've got 2, perhaps 3, pensions:

1. Standard Life Workplace Pension - commenced 1/1/15, around £125pm going in, will stop 31/8/15 when my SSP finishes
2. HSBC Stakeholder Pension - started whenever Stakeholders commenced, has around £12k value. Was putting £64pm in to this from when it started. It ceased 31/12/14 when the Workplace took over.
3. Pearl Assurance - started around 1998, can't remember when it stopped and can't recall if I transferred this to the HSBC. If put a trace on this pension for more information. Perhaps someone could look at the HSBC figures and see whether it looks like with annual returns if it looks like extra money has been transferred. I know I've not paid in to this for a long time.

My wife also has a £25pm personal pension which she has been contributing to for 6-7 years.

Will these all automatically transfer to my wife upon my death or do I need to make changes? I've got the recent paperwork from HSBC so can let you know of any info you may need.

It may also be worthwhile to look at my other thread in the Benefits section (can't post link as I'm a newbie!) as well for background information if there are benefits to be had which I'm missing?

Thanks in anticipation

TrainGeek

hugheskevi · 19 April 2015 at 7:11PM

I've been recently diagnosed with a life-limiting illness.

How life-limiting, is death expected within 12 months? If so, you can access the pensions immediately. More information about that at this link.

Will these all automatically transfer to my wife upon my death or do I need to make changes?

With each pension there is a death benefit nomination, which is a person or organisation you nominate to receive the asset in the event of death. Assuming you want the pensions to pass to your wife then it would make things easier if you ensure that she is the nominated beneficiary on all the policies.

It may also be worthwhile to look at my other thread in the Benefits section (can't post link as I'm a newbie!)

Here is a link.

TrainGeek1808 · 19 April 2015 at 7:24PM

I'm told 12-18 months but possibly 3-5 years - very non-committal at the moment until September.

Taking the lump sum would boost my savings and therefore I assume affect my benefits?

I'll look in to the named beneficiary for my wife as well - presumably I can just write to them and advise them?

Thanks, especially for the link!

TrainGeek

hugheskevi · 19 April 2015 at 7:29PM

I'm told 12-18 months but possibly 3-5 years - very non-committal at the moment until September.

Then you probably won't be able to access under Terminal Illness rules, at least at this stage. Although it sounds like you may not want to do that anyway. If it is any consolation, diagnosis of terminal illness beyond about 6-9 months is extremely uncertain.

Taking the lump sum would boost my savings and therefore I assume affect my benefits?

Yes, it would count as capital with consequential impacts.

I'll look in to the named beneficiary for my wife as well - presumably I can just write to them and advise them?

It would be best to contact each pension provider and enquire about who is the existing named death beneficiary. They probably have a death beneficiary form which you can complete if a change is necessary.

jamesd · 20 April 2015 at 1:33AM

One other thing to be aware of should you be in a situation where you are entitled to take a serious ill health lump sum: there is no penalty from HMRC for going over the £40,000 annual pension contribution allowance. You probably won't have the earned income to go over this anyway but the combination of paying money into a pension, getting 25% tax relief added, then taking it all out with no tax to pay is good.

You can probably do this to a more limited extent already since it is possible that your taxable benefits are less than your income tax personal allowance. However, to take the money out you have to either be 55 or using the serious ill health lump sum exception that's available at any age. So if you're not 55 yet it'd be something to do only after a life expectancy likely to be no more than twelve months declaration.

TrainGeek1808 · 1 May 2015 at 9:25PM

Got my trace details from Pearl Assurance (now Phoenix Life) today.

Form sent off today; how long would a response from them normally take?

Thanks

TrainGeek

dunstonh · 1 May 2015 at 11:36PM

Form sent off today; how long would a response from them normally take?

Phoenix are taking about 10 days on ex Pearl policies for providing details (had two requests for info arrive during the week which were asked weeks earlier)

TrainGeek1808 · 8 May 2015 at 8:50PM

dunstonh wrote: »

Phoenix are taking about 10 days on ex Pearl policies for providing details (had two requests for info arrive during the week which were asked weeks earlier)

Thanks - hopefully some time next week then I should hear from them.

TrainGeek

TrainGeek1808 · 26 May 2015 at 11:22PM

dunstonh wrote: »

Phoenix are taking about 10 days on ex Pearl policies for providing details (had two requests for info arrive during the week which were asked weeks earlier)

Still not heard anything - is this unusual?

Thanks

TrainGeek

TrainGeek1808 · 28 May 2015 at 12:06AM

Do I have any control, or is it written in Law, how long the pension to my wife would be paid over - or is it dependant on the pension company?

I understand it can be taken as a tax free lump sum now, or tax free as (weekly/monthly?) income - is that correct?

Thanks

TrainGeek

jamesd · 28 May 2015 at 6:13AM

The time depends on the pension company.

Assuming that you are under 75 at time of death she can take the whole pension pot as a tax free lump sum or any part of it tax free at any time. That can be periodic lump sums, regular income or any other way she chooses. Pension firms are not required to offer all of those options and if one doesn't she can transfer to one that offers what she wants. One place that is not expensive for the amounts involved here is Hargreaves Lansdown. No charge for regular or irregular income. Their charge is 0.45% of the pot size a year, split into monthly pieces. I mention them in part because they are very helpful in getting money moved around and explaining the way things work, so it could be a good move to combine all of your existing pensions with them to make life easier for her and you to manage later.

So far as benefits for her go, she's not required to take pension money until she reaches the age at which Pension Credit would be paid to her. Taking irregular lump sums would usually be the way that works best with means tested benefits, always ensuring that her level of savings stays below the savings limit for any means tested benefits she's on. If she was to take regular income instead that would be treated as normal income and would reduce means tested benefits.

Neither of you can currently take any of it because you are not 55 years old or older. That changes as soon as your doctors are willing to say that they think that your life expectancy is no more than one year. At that point you, but not her, can choose to take any part of any pensions as a "serious ill health" tax free lump sum whenever you wish.

These really are all 100% tax free, not the 25% tax free limit that applies to normal withdrawing.

Pension after my lifetime

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