Cutting out the Insurance Company

Poohbah

I am in the postion of having pension funds in the region of £48k before the lump sum and understand that with an annuity, if I die these will revert to the Insurance company, a situation that to say the least I'm not happy with. I've heard of capped drawdown - this appears to be the one that I'm eligible for - but are there any other ways open to me to ensure that the pension pot will be credited to my estate?

Many thanks for any advice.

Steve

dunstonh

if I die these will revert to the Insurance company, a situation that to say the least I'm not happy with.

If you do not buy any guarantees on death then that is the case.

I've heard of capped drawdown - this appears to be the one that I'm eligible for - but are there any other ways open to me to ensure that the pension pot will be credited to my estate?

unsecured income is the most common method. However, at no point does your money go to your estate. It is paid outside of the estate and is taxed as income tax if continued as an income by the beneificary or at 55% if taken as a lump sum (which is not as high as it sounds).

Linton

Its not quite fair to say the money reverts to the insurance company.....

The real risk in retirement planning is not that you die early but rather that you live too long and run out of money. With an annuity, payment is guaranteed for however long you live subsidised by those who die early, which is not the case with drawdown.