When I Die

ggooner

I have 2 private pension pots.
If I dont touch the money in the pots and I die when I am 68.
What happens to the money in the pots?

Andy_L

It goes to who ever inherits your estate, either staying within a pension or being paid as a lump sum but then subject to various taxes to make up for the tax relief it received.

System

Andy_L wrote: »

It goes to who ever inherits your estate, .

A pension isn't part of your estate. It goes to whoever you have nominated when you took out the pension.

Aegis

ggooner wrote: »

I have 2 private pension pots.
If I dont touch the money in the pots and I die when I am 68.
What happens to the money in the pots?

If the money is uncrystallised (i.e. you haven't taken a lump sum from the pot), then up to age 75, the money passes free of tax to a nominated beneficiary that you have identified using a form provided by your pension provider.

After age 75 or if you have commenced the pensions prior to death, the money can still be passed across but will be subject to tax at 55%. Alternatively you can identify a dependent to receive a pension, in which case no tax is payable on the transfer but no lump sum can be taken either, only a pension from either an annuity purchase or an income drawdown facility.

peterg1965

Aegis wrote: »

If the money is uncrystallised (i.e. you haven't taken a lump sum from the pot), then up to age 75, the money passes free of tax to a nominated beneficiary that you have identified using a form provided by your pension provider.

Is this done automatically or do you have to request the form from your provider? I do not recall nominating a beneficiary for my HL SIPP I started 3 years ago, or is it automatically assumed to be surviving spouse who inherits?

mania112

If you're married and you haven't nominated a beneficiary, it will be your spouse.

I think I can say that as fact, rather than it be different from provider to provider.

Always best to explicitily nominate though and to ensure your Will is uptodate.

Aegis

peterg1965 wrote: »

Is this done automatically or do you have to request the form from your provider? I do not recall nominating a beneficiary for my HL SIPP I started 3 years ago, or is it automatically assumed to be surviving spouse who inherits?

Best bet is to call them and ask of a "Nomination of Beneficiary" form has been completed. If it hasn't, they can tell you how they require that instruction and can implement it for you.

If this isn't completed, the trustees often make a common sense decision as to who should receive the benefits, but not all providers do this. One in particular that I saw recently told me that a lack of this form would result in the benefit being paid out to the deceased's estate, regardless of any tax charges that might be due. In our client's case, this might have meant both the 55% tax charge and inheritance tax on the money - clearly a sub-optimal option!

As mania112 says, most providers are more sensible than this!

nicknameless

peterg1965 wrote: »

Is this done automatically or do you have to request the form from your provider? I do not recall nominating a beneficiary for my HL SIPP I started 3 years ago, or is it automatically assumed to be surviving spouse who inherits?

I recently started a HL SIPP and was asked to complete a beneficiary form (automatically received through the post).