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    • Not Me Officer
    • By Not Me Officer 11th Jun 17, 1:30 AM
    • 239Posts
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    Not Me Officer
    Parents, pensions & wills
    • #1
    • 11th Jun 17, 1:30 AM
    Parents, pensions & wills 11th Jun 17 at 1:30 AM
    We nearly lost my grandmother recently which i think has triggered my mother to start thinking about wills and planning after death because she's started to talk about it all of a sudden.

    My mother is a widow in her mid 50s. She has no pension, the mortgage is paid off and she has somewhere around £60k-£65k in cash, then there's the house that i would hazard a guess at being £200k

    When my dad was still alive had my mother died first her possessions would've obviously gone to him, but what happens now? There's 3 kids involved including myself, i say kids but we're all adults (i just mean her children). There's no will in place.

    I imagine if her money remains in cash or even if it got wrapped up in a S&S ISA that it would be split 3 ways between her children, but what if it was in a pension? Does the money 'come out' and get split, does it get drip fed, would a will have to be made up? Is it even worth her putting money in a pension at such a late stage or just a S&S ISA? These are all things she's asked lately.
Page 1
    • p00hsticks
    • By p00hsticks 11th Jun 17, 1:45 AM
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    p00hsticks
    • #2
    • 11th Jun 17, 1:45 AM
    • #2
    • 11th Jun 17, 1:45 AM
    My first question would be not what happens to her possesions after she dies, but how she is going to support herself into old age ? Savings of £60k odd aren't likely to pay all her bills for 20 years plus after she reaches 65 or so ..

    Is she currently working ?
    If she is, why is she not paying into a workplace pension ?
    What sort of state pension can she expect ?
    Is she receiving anything from your dads pension ?

    What happens to any pension on death depends on the type of pension - she could get a guaranteed annuity for life, or if she wants to ensure that her children get what is left of any pot then that's also possible, but she needs a pot in the first place to be able to do that.

    Rules on intestacy are here
    https://www.gov.uk/inherits-someone-dies-without-will
    Last edited by p00hsticks; 11-06-2017 at 1:49 AM.
    • bigadaj
    • By bigadaj 11th Jun 17, 8:00 AM
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    bigadaj
    • #3
    • 11th Jun 17, 8:00 AM
    • #3
    • 11th Jun 17, 8:00 AM
    We nearly lost my grandmother recently which i think has triggered my mother to start thinking about wills and planning after death because she's started to talk about it all of a sudden.

    My mother is a widow in her mid 50s. She has no pension, the mortgage is paid off and she has somewhere around £60k-£65k in cash, then there's the house that i would hazard a guess at being £200k

    When my dad was still alive had my mother died first her possessions would've obviously gone to him, but what happens now? There's 3 kids involved including myself, i say kids but we're all adults (i just mean her children). There's no will in place.

    I imagine if her money remains in cash or even if it got wrapped up in a S&S ISA that it would be split 3 ways between her children, but what if it was in a pension? Does the money 'come out' and get split, does it get drip fed, would a will have to be made up? Is it even worth her putting money in a pension at such a late stage or just a S&S ISA? These are all things she's asked lately.
    Originally posted by Not Me Officer
    Get her to make a will, it's a lot easier for everyone.

    Then she needs to think about her own retirement, is she currently working, does she have a full NI record for state pension, which is now 10-15 years away?
    • atush
    • By atush 11th Jun 17, 9:18 AM
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    atush
    • #4
    • 11th Jun 17, 9:18 AM
    • #4
    • 11th Jun 17, 9:18 AM
    Did your father make it to pension age? He may have some S2P, second pension part of his NI record. Your mother would inherit part f this to add to any SP she has. Did he have any work pensions?

    But she really needs to check her contribution record and get a statement of how many qualifying years she has. She will need a min of 10 for any SP now.
    • Not Me Officer
    • By Not Me Officer 11th Jun 17, 9:28 AM
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    Not Me Officer
    • #5
    • 11th Jun 17, 9:28 AM
    • #5
    • 11th Jun 17, 9:28 AM
    Thanks.

    Yes she receives a portion of my dads pension. All i was told is that because of the age gap between them (19 years) she receives a reduced amount than what she would've if they were say same age or thereabouts.

    On the topic of that what happens there? I have no idea what my dads pot was at the time of his death. £100k, £200k i've really no idea but my mother is receiving a portion of it.
    Let's say there's an amount still in that pot on my mothers death - £50k, £100k whatever ... what actually happens to that?

    Of course i'm speaking for our own situations but i'm also generally asking as well - what would happen to anyone in that situation? I doubt it would pass further down the line to their children (but would be nice if I was wrong) so my question is really where does his/her money go to?

    And am i about to find out the down side of saving in a pension - does your money go to the government for example whereas if it was in an ISA it would stay within your family - ALL of it? That is personally what i would want, if i died then the money i've worked for and set aside all my life to go to my wife and on her death it to pass to any children should we have any (or anyone she decides to leave it to).

    Back on the topic of my mother i know she started working when she was about 15-16 but had to stop through disability around age 40-45 with my dad only recently dying.
    • AnotherJoe
    • By AnotherJoe 11th Jun 17, 9:44 AM
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    AnotherJoe
    • #6
    • 11th Jun 17, 9:44 AM
    • #6
    • 11th Jun 17, 9:44 AM
    What happens to your mothers pension and what happens to "anyone's" pension depends what type of pension it is.
    Most likely in your mothers case since this is a pension that's being paid on a regular basis, amd is a pension dating from some years ago, when she dies, (which you might consider that statistically this won't be for another 35 years ), that will be it.

    If however if it was the more recent types of pension, the sort you might have now, where you have a lump sum from which you take money as you need it, that can be inherited as a pension by your descendants, so it isn't lost.

    There are variations on this theme though, so there is no single simple answer.
    • bigadaj
    • By bigadaj 11th Jun 17, 9:45 AM
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    bigadaj
    • #7
    • 11th Jun 17, 9:45 AM
    • #7
    • 11th Jun 17, 9:45 AM
    If you state waht type of pension your father had, or who his employers were then people can probably give a good idea of the pension rules.

    If you died early then you should have completed a nomination of benefits form, the pension is held in trust so it's up to the trustees who they oay out to but very unusual not to follow your wishes if it was to pay out to your wife for example.

    On that note make sure you make a will if you have dependants, it saves a lot of hassle and worry for your loved ones if something terrible does occur.
    • xylophone
    • By xylophone 11th Jun 17, 9:53 AM
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    xylophone
    • #8
    • 11th Jun 17, 9:53 AM
    • #8
    • 11th Jun 17, 9:53 AM
    Has your mother checked her state pension situation?

    https://www.gov.uk/check-state-pension

    Was your father in a defined benefits pension scheme so that your mother is now receiving a widow's pension?

    If so, this will be paid to her for the rest of her life ( but check any "remarriage clause" in the rules of the scheme) - there will be nothing for anybody else to inherit.

    Your mother should make a will - she can discuss its terms with her solicitor.

    It appears that your mother has no relevant earnings - she could still choose to contribute to up to £2880 per annum to a pension and receive tax relief of £720.

    She would complete a statement of wishes in regard to this pension.

    It must be remembered that your mother's assets are there primarily to support her - this should be borne in mind in respect of any means tested benefits/care needs.
    • Mojisola
    • By Mojisola 11th Jun 17, 9:58 AM
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    Mojisola
    • #9
    • 11th Jun 17, 9:58 AM
    • #9
    • 11th Jun 17, 9:58 AM
    Back on the topic of my mother i know she started working when she was about 15-16 but had to stop through disability around age 40-45 with my dad only recently dying.
    Originally posted by Not Me Officer
    Was she claiming any health benefits? Some give you credits towards your pension.
    • atush
    • By atush 11th Jun 17, 4:31 PM
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    atush
    so she should have 24-29 years of NI contributions.

    She could look into buying more years to get to full SP.

    Have her get a SP statement.
    • Not Me Officer
    • By Not Me Officer 11th Jun 17, 5:18 PM
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    Not Me Officer
    Wow a lot to think about. More complicated than i thought.

    Regards the remarry - she wont. I know people on the outside looking in will say never say never, you never know what tomorrow will bring and all those cliches but i suppose you'll just have to trust for the purpose of this questioning that she will never remarry so that rules that one out.

    Also regards:

    It must be remembered that your mother's assets are there primarily to support her - this should be borne in mind in respect of any means tested benefits/care needs.
    Originally posted by xylophone
    this ^ all 3 of us, especially I (since i have more dealings with money than the other 2) have told her numerous times that the money is really hers so she should enjoy it while she can. Obviously i'm not suggesting she goes and blows the lot at a casino or whatever but its hers and she should spend and budget as she sees fit but despite this she is insistent that she wants to leave behind what she can. She has always had that mentality throughout - helping her children as much as she can, even sometimes too much, such as with my brother who's early 20s - she still gets up early to make sure he's up for work. This is only one example of (in my opinion) it being too far and say she should make him stand on his own feet which she says she knows but she just can't not help and "you'll understand when you have kids".


    I have no idea what type of pension it is. I know it was before this modern workplace pension came into play and i know he had been paying into it for years which his employer also paid into. The employer would match to a percentage but i don't know what that was.
    I don't really feel comfortable naming names on a public forum but he worked for a company that is around England, maybe in Scotland too i'm not sure but it's certainly around England. Not on the scale of say Sainsbury's which is all over the place but it wasn't just one employer dotted in one location.
    How would you find out what type of pension it was so that we could make better sense of it?

    How do you buy more years and is this a costly thing?
    Off the top of my head my dad was getting something like £800-£900pm but i think my mother gets like £300-£400pm from the pension. I'd need to ask her for specifics and even then she may not be able to tell me what he was getting exactly. So would it even be worth her buying more years is a question?

    Hope i've covered everything there.
    • p00hsticks
    • By p00hsticks 11th Jun 17, 7:01 PM
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    p00hsticks
    I have no idea what type of pension it is. I know it was before this modern workplace pension came into play and i know he had been paying into it for years which his employer also paid into. The employer would match to a percentage but i don't know what that was.
    How would you find out what type of pension it was so that we could make better sense of it?
    Originally posted by Not Me Officer
    THe fact that your father was getting a regular sum each month and your mother gets a proportion of that since he dies suggests it is likely to be a Defined Benefit scheme - one where he was promised a certain amount each month linked to his salary, however long he lived, with a similar benefit for his widow if he died before her.

    If this is the case, there is no 'pot' to be passed on further on your mothers death.
    The pension scheme itself will be able to confirm the type of pension and whether this is the case.

    How do you buy more years and is this a costly thing?
    Originally posted by Not Me Officer
    If you mother is unlikely to get enough years NI credits for a full state pension she could buy more - but first she needs to see how many she already has, by using the link xylophone has provided. She also needs to be aware that, as Mojisola points out, if she is getting any disability benefits such as ESA or PIP she will be getting NI credits anyhow.

    If she is not getting credits and does not qualify for a full state pension then she could in the future buy voluntary Class 3 NI contributions at a cost of around £733 a year, and each year bought would add around £4.35 a week to her state pension up to the maximum of £159.55

    Guide to topping up here
    https://www.royallondon.com/Global/documents/GoodWithYourMoney/TOPPING-UP-YOUR-STATE-PENSION-GUIDE.pdf
    Last edited by p00hsticks; 11-06-2017 at 7:05 PM.
    • Not Me Officer
    • By Not Me Officer 11th Jun 17, 9:07 PM
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    Not Me Officer
    THe fact that your father was getting a regular sum each month and your mother gets a proportion of that since he dies suggests it is likely to be a Defined Benefit scheme - one where he was promised a certain amount each month linked to his salary, however long he lived, with a similar benefit for his widow if he died before her.

    If this is the case, there is no 'pot' to be passed on further on your mothers death.
    The pension scheme itself will be able to confirm the type of pension and whether this is the case.
    Originally posted by p00hsticks
    Capita hartshead is a name that comes to me. I'm sure this was on paperwork after he died if that helps.
    At any rate what happens to all the money he put in then after my mother dies? Feeds the government?
    And how would i make sure that my money doesn't go that way? I personally think it's very wrong but that's just my opinion.



    she could in the future buy voluntary Class 3 NI contributions at a cost of around £733 a year, and each year bought would add around £4.35 a week to her state pension up to the maximum of £159.55
    I would of course have to get her to use the calculator but it would be hardly worth it wouldn't it?
    £4.35 per week adding up to £226.20 per year so it wouldn't even come close to covering the £733 she'd have to pay out.

    As for her benefits i'm sure i remember her talking about disability living allowance and income benefit.
    But now i think it's DWP EESA and DWP DLA if this helps any and she's had these things throughout.
    • Mojisola
    • By Mojisola 11th Jun 17, 9:10 PM
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    Mojisola
    But now i think it's DWP ESA
    Originally posted by Not Me Officer
    So she should have been getting credits towards her pension for these years.

    Get a state pension forecast.
    • Mojisola
    • By Mojisola 11th Jun 17, 9:12 PM
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    Mojisola
    At any rate what happens to all the money he put in then after my mother dies? Feeds the government?
    Originally posted by Not Me Officer
    If it's a private pension, the money stays with the company.
    • atush
    • By atush 11th Jun 17, 9:35 PM
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    atush
    At any rate what happens to all the money he put in then after my mother dies? Feeds the government?
    i am afraid this is a very ignorant comment. No offence intended as you came here to be enlightened.

    If it is a DB final salary type pension, his small contribution has probably already been paid out with interest. But in general, this type of pension has those who die early, supporting those that live til their 90's-100's. And does pay out to spouses and dependents for years after death.

    In fact, with DB pensions, the employer pays most of the contributions. And carries a financial burden going forwards if they live longer than normal. Some companies have been known to fail under the burden.

    This long winded payout system means this type of pension is skewed to the benefit of the employee- not employer. And the Govt doesnt get a penny of it. Unless they get paid enough to be more than their personal tax allowance. In which case they arent really poor?
    • Not Me Officer
    • By Not Me Officer 11th Jun 17, 9:50 PM
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    Not Me Officer
    i am afraid this is a very ignorant comment.
    Originally posted by atush
    You can call it ignorant, i call it a guess as i don't know but don't worry, no offence was taken regardless ATEOTD it's just words on a screen so i'm not going to get offended And you're spot on why i came here.

    We spoke a little about pensions before he died and i do know that he paid into a pension for the vast majority of his working life and he began when 14 i think it was. May have been 15. I remember it was certainly before 16 when he left school and started work. I know in addition to his normal job role and as well as being a health and safety person at his workplace also i do remember him being some sort of pensions representative for the company and used to go to meetings in London. Not trying to say this made him anything supergreatamazing but he wont have done all that and paid barely anything in i can say for sure.
    Regards the employer he was with as he retired, i also remember while they paid in they didn't pay more than him. I just thought at the time it was quite good how his employer at least paid in while mine didn't.

    So the employer didn't pay most of the contributions and in the time since his death with the amounts my mother has received since i would also doubt she has received more than he put in over the years. It'll be about 5 years now and i highly doubt he only put aside enough to cover himself for 5 years of retirement with nothing after that, in fact he didn't. And that would've been on the figure he would've been pulling each year and not a percentage of it which is what my mother is getting.

    Not arguing here, just saying.
    Last edited by Not Me Officer; 11-06-2017 at 9:53 PM.
    • Thrugelmir
    • By Thrugelmir 11th Jun 17, 10:04 PM
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    Thrugelmir

    So the employer didn't pay most of the contributions and in the time since his death with the amounts my mother has received since i would also doubt she has received more than he put in over the years. It'll be about 5 years now and i highly doubt he only put aside enough to cover himself for 5 years of retirement with nothing after that, in fact he didn't. And that would've been on the figure he would've been pulling each year and not a percentage of it which is what my mother is getting.
    Originally posted by Not Me Officer
    That's the nature of pooled risk. Some people are winners and some losers. The purpose though isn't to ensure an inheritance is passed to the next of kin.
    “ “Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.” Sir John Marks Templeton
    • Not Me Officer
    • By Not Me Officer 11th Jun 17, 10:07 PM
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    Not Me Officer
    That's the nature of pooled risk. Some people are winners and some losers. The purpose though isn't to ensure an inheritance is passed to the next of kin.
    Originally posted by Thrugelmir
    While i accept that and agree, if i could have the option to go one way and have that happen or go another and have it not happen then so long as there's zero difference to the money i receive in retirement (since like you said that's what it's for) then obviously i would go the way of making sure it could pass on.
    • p00hsticks
    • By p00hsticks 11th Jun 17, 10:20 PM
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    p00hsticks
    So the employer didn't pay most of the contributions and in the time since his death with the amounts my mother has received since i would also doubt she has received more than he put in over the years.
    Originally posted by Not Me Officer
    If your mother's been receiving a widows pension for five years and is still only in her mid fifties they may well have to continue to pay out a pension to her for another thirty or forty years - as long as he would have been paying in.
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