Death before retirement age

MrAnalogy

Just a quick update (if anybody is interested ) - best impaired annuity quote came back at about £65 p.a. per £1000 (single, level, 5 year g'tee).

In discussion with my wife we are currently thinking that this looks to be the best option for me/us - you never know - I could live to be a hundred!

Will have to wait until April for restrictions to come off the protected element of the overall fund, so may reconsider before then (but probably not - unless the general annuity rates drop even further!).

Thanks once again for all the helpful ideas and suggestions throughout the course of this thread.

Best Regards

Linton

SallyG wrote: »

That 55% tax on what's left in the posthumous drawdown pot - why is it 55% - what are we punished for?

I believe it's to discourage people trying to avoid inheritance tax by putting their spare wealth into a pension which they have no intention of taking. The extra beyond the inheritance tax level is to reimburse the taxman for the tax rebate when the pension was set up.

jamesd

That's promising, implies that a scheme pension for drawdown might also do well and provide better death benefits.

The 55% is to get back the tax relief. The government will subsidise income in retirement but isn't so keen on doing it when it's no longer for retirement income.

MrAnalogy

I have already emailed a scheme pension provider to request some information about their product and if they deal with smaller funds, but whether they will get back to me is another matter.

To be honest I had assumed that most likely this option would not fly for me - after your earlier link to a site where mention was made of legislation changes coming in regarding this route.

Truthfully though, having read through the posting there, I still did not really understand what was being changed and how it would impact on me if I went for an SP. The only thing that really stuck in my mind was that one of the (few!) providers were going to discontinue this product as it would become prohibitively expensive!

Anyway, hopefully I will get a reply to my email, and that should help confirm whether a Scheme Pension is a non-starter or not.

Best Regards