Private pension payout - Please help!!

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Hi,

I am in need of some advice and I would really appreciate your feedback.

My mother in law passed away two months ago aged 64, unfortunately she did not leave any assets/savings and latter we found out she had a private pension with co-operative bank, from there she was receiving£119 per week.

I called annuity department and notified them of everything, asked who is the next of kin on the pension file and they notified me it was in my father-in-laws name. My In-laws got divorced in December 2010, and when I told them that my wife was their only child, they said that the pension fund will come to my wife as she would be the next of kin in line. Co-Op wanted to see the death certificate, their divorce papers along with my wife's birth certificate. I did send it all to them and after waiting a while and chasing them up 4-5 times, they have sent us a letter today showing:

"The pension fund has now been ceased and nothing further is payable"

As it's not a government pension, and my mother-in-law had paid for the pension fund, I find it hard to believe that the bank can just keep the money and not pay out anything.

Please can anyone advice - Should I give up or does my wife have any other right to claim this pension fund?

Thank you in advance for reading this...

jem16

reload wrote: »

As it's not a government pension, and my mother-in-law had paid for the pension fund, I find it hard to believe that the bank can just keep the money and not pay out anything.

A crystallised pension dies with the holder unless a joint life or guaranteed annuity has been purchased.

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jem16 wrote: »

A crystallised pension dies with the holder unless a joint life or guaranteed annuity has been purchased.

Thank you so much for a quick reply, I am going to be really naive and ask what is a crystallised pension?

jem16

reload wrote: »

Thank you so much for a quick reply, I am going to be really naive and ask what is a crystallised pension?

A crystallised pension is one where the benefits have been taken - i.e. you have purchased an annuity and are receiving a monthly pension.

There are slightly different rules for unsecured pensions in payment - often called drawdown - but you mentioned annuity department so I assumed annuity.

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jem16 wrote: »

but you mentioned annuity department

Thanks again, on the letter it says annuity has been ceased so I suppose that's the end of this. At least I know where we stand - many thanks.

hugheskevi

As it's not a government pension, and my mother-in-law had paid for the pension fund, I find it hard to believe that the bank can just keep the money and not pay out anything.

Just so you know why this is...

A pension is divided into two stages - building it up (the accumulation phase) and drawing it in retirement (the decumulation phase).

If someone dies during the accumulation phase, whatever pension pot they have built up is passed on.

The purpose of an annuity is to pool a large number of people together, so that the pension pots of those who die earlier subsidise those who live to a ripe old age. Once the money in the pension pot is used to buy an annuity you get a guaranteed amount for as long as you live.

As such once the person dies, the pension dies with them (subject to features which may have been purchased, such as survivor benefits or guarantees).

Once you appreciate the purpose of an annuity it hopefully doesn't seem too unfair - your mother-in-law was unfortunate to die at a young age, but equally there will be some other annuity recipient who will go on to live to a hundred and get an excellent outcome from the annuity.

kidmugsy

Think of an annuity as being insurance against spending all your capital and ending up penniless. As hugheskevi says, it's then a lottery who lives a long time and who a short time, but none of them end up without an income.