Annuity, lump sums and other stuff

littlelynn

Hello all!

I have recently lost my dad and we are a bit confused about the best thing to do with any funds that my mum receives from his pensions etc and any money he owed when he died.

Could anyone please advise as to:

a) Is my mum best taking a lump sum or annuity from the pension funds?
b) How do we avoid any debt companies trying to claim my dads debts from my mum? (most have ppi, at least one loan does not)
c) What is the best way to reduce the amount the tax man creams off?
d) What would be the best thing to do with any lump sums that have already been sent (there was no other option with these ones).

Any guidance would be fantastic! Thanks in advance!

dunstonh

a) Is my mum best taking a lump sum or annuity from the pension funds?

Could be either depending on the type of pension, what terms are offered and how she wants and/or needs the money.

b) How do we avoid any debt companies trying to claim my dads debts from my mum? (most have ppi, at least one loan does not)

Pay them what they are entitled to and nothing else.

c) What is the best way to reduce the amount the tax man creams off?

usually its a bit late to start planning once someone has died. However, its not impossible. The fact you are concerned about tax suggests its a large estate and not all of it is going to your mum.

d) What would be the best thing to do with any lump sums that have already been sent (there was no other option with these ones).

depends on what is needed/wanted and personal circumstances.

Any guidance would be fantastic! Thanks in advance!

Sorry to be vague but what you ask has no one-size-fits-all answer. Its way too specific to be answered on a forum. All the questions could be answered by a local IFA who can visit your mum and run through the paperwork and give advice. However, without knowing any of the facts and needs, its impossible to really give any more detail.

Sorry for the loss of you dad.

littlelynn

Hi Dunstonh

Thanks for your response so far!

Ok.. here goes

There isn't a large estate - infact nothing at all!

The pensions are private ones set up over the years by my dad. The companies concerned have only offered either an annuity or a lump sum to be paid to her. Mum is 54, so not yet at retirement age and needs the money to last her basically, for the rest of her life.

thanks again

EdInvestor

Lump sum death benefits are usually paid tax free.Annuities are taxable.She may not have a choice as to which she is entitled to. As to investment of lump sums, that depends on her attitude to risk and what return/income she is seeking.

littlelynn

thanks edinvestor!

I think mum would prefer low risk and something that will keep her pension/income topped up so that she can afford to pay bills etc whilst paying as little tax as poss.

And what about the loan without ppi? If there is no estate, can they claim any money my dad owed from the death benefits?