Pension in a Will

iwalker147

If I make a will, can I specify who'll get my pension?

Also, can they take the fund as a lump sum if I don't make retirement age?

I'm thinking this would obviate the need for life insurance to pay off the mortgage!

atush

It depends on what you mean by pension as there are differnt rules depending on if you have taken your pension yet or died in service.

And if you have taken it, will you buy an anuity or will you do a pension draw down. And if you buy an anuity if you leave surviviors benefit to a spouse, or opt for a pension gurantee for 5 or even 10 years.

dunstonh

Most pensions are not included in the estate and not subject to instructions left in a Will. You give the pension provider your "expression of wish" as to whom you want to get it and how much their share is.

Also, can they take the fund as a lump sum if I don't make retirement age?

That is the normal way unless it is a defined benefit scheme or there is protected rights on the pension.

I'm

thinking this would obviate the need for life insurance to pay off the mortgage!

what type of pension is it as that would usually impact on the decision. Also, you have to consider how much the pension is worth in death. If it is money purchase and you have only paid in a few years and its worth £10k on death then that is all that will be paid out.

Normally, you wouldnt use the pension to cover a life assurance need for mortgages but you would for family protection/income replacement. i.e. if all the money has to go to the mortgage, it leaves the spouse/partner/family with no pension as well as the lost income from the deceased. Saving £5-£10 pm for that is usually viewed as a false economy,

antrobus

iwalker147 wrote: »

If I make a will, can I specify who'll get my pension?

Generally speaking, no. Who'll get your pension will be determined by the rules of the specific pension fund in question. To the extent that you have any choice in the matter, the trustees of the relevant pension fund will ask you to nominate someone.

iwalker147 wrote: »

Also, can they take the fund as a lump sum if I don't make retirement age?

It's usual these days, for individuals to be asked to nominate a beneficiary should they not make retirement age, and for these things to be arranged so that the value of the fund passes directly to the nominee(s) without passing through the estate.

iwalker147 wrote: »

I'm thinking this would obviate the need for life insurance to pay off the mortgage!

That's perfectly possible. I'd go and speak to your pension provider and ask them the questions.