Next of kin pension

suzr_2

Hi, I am trying to get some information on Martin talking about pensions on daybreak this week. It was something to do with next of kin claiming a pension when someone is deceased. Does anyone know what it was and could they give me anymore info on it? Thanks

atush

It depends on the type of pension (ie money purchase or final salary) and if the pension was commenced or not.

If the pension was not started yet at the time of death, a lump sum can be paid to the beneficiaries w/o tax charge. If it has been commenced (ie started and they have taken their 25% TFLS) then if annuity the pension might have guarantees or might have a spouse benefit (commonly 50%) or nothing if the person did not think to support his spouse.

If in Drawdown, the pension can be inherited 100% by a spouse (if the pension is left in the DD pot for use as a pension for the spouse) or can be taken as a Lump Sum by the beneficiaries subject to a 55% tax charge.

Be_Happy

Another pension 'inheritance' to be aware of is a dependant's pension.

My mother had a small pension from a previous employer. When she died I discovered my downs syndrome sister aged 55 was entitled to a 50% pension from Mum's pension. The criteria was - 'had lived with Mum and was unable to earn a living'.