Pension draw down in old age

paulianne

If I'm not in the right place, apologies. My question: my father is 93. He has been drawing his private pension for forty years. Currently not in good health. He is not sure how much is left in his pension pot, but should he die soon his wife would not be entitled to any of his private pension and payments which are currently monthly would cease. As she is in good health it may mean she would suffer some hardship because of this. Both are living at home with good quality care. My question is would it be possible for him to take what is left out of his pension pot and put it somewhere that my mother could access on his death. I believe he can wish five times his pension payment to someone at death, but this may be less than what is left in. Hope this doesn't sound greedy, but just trying to ensure they have the best of the time they have left.

kidmugsy

paulianne wrote: »

... my father is 93. He has been drawing his private pension for forty years. ... He is not sure how much is left in his pension pot, but should he die soon his wife would not be entitled to any of his private pension ... My question is would it be possible for him to take what is left out of his pension pot and put it somewhere that my mother could access on his death.

Is it really a "private pension" or is it an occupational pension?

How do you know that she would not be entitled to any pension from it? Did your father buy a single life annuity?

If he did buy an annuity then he no longer has a pension pot: he used that to buy an annuity forty years ago.

paulianne wrote: »

I believe he can wish five times his pension payment to someone at death ...

I am unfamiliar with this idea. But if he bought a normal single life annuity there will be nothing "left in". Or are you referring to some aspect of the deal he signed up to?

jamesd

It's very unlikely that he has a pension pot for a pension that has been making payments for 40 years. It's probably an annuity or workplace defined benefit pension and neither of those has any pot available to those who have started taking an income.

Given his age of 93 it is a pretty good deal to get five times his pension income in a lump sum death payment. Such payments would be normal for workplace defined benefit schemes, but not for modern annuities.

Just how much hardship might your mother suffer? Would her income be so low that she might qualify for means tested benefits, say less than £170 or so a week? If so it might be sensible to ask that his lump sum payment be paid to someone else so that it would not interfere with her getting means tested benefits. That other person could then periodically give her money or things. periodically because regular payments would be treated as income by means tests.

paulianne

It is an occupational pension he started when he was a very young man. I read on the invensy's site that he can fill in a form to wish his wife five times his pension payment, but I'm not sure it relates to his. Dad unfortunately isn't of much help with information. As I have power of atourney for him, I think I can check with Invensy's, I just didn't want to ruffle their feathers yet.

Your_Hero

paulianne wrote: »

It is an occupational pension he started when he was a very young man. I read on the invensy's site that he can fill in a form to wish his wife five times his pension payment, but I'm not sure it relates to his. Dad unfortunately isn't of much help with information. As I have power of atourney for him, I think I can check with Invensy's, I just didn't want to ruffle their feathers yet.

I highly doubt your father is in "pension draw down". He has a scheme pension or annuity which is paying him a pension for life. No lump sum benefit although there may be a dependent's pension usually 50% of his current pension. Check with the pension provider.

kidmugsy

paulianne wrote: »

As I have power of atourney for him, I think I can check with Invensy's, I just didn't want to ruffle their feathers yet.

We have had to deal with very ancient parents, so I know whereof you speak. My guess would be that the Invensys pension scheme probably has some experience of fielding questions about the old folks' pensions from children with PoA. I doubt if there's any need to worry about ruffling their feathers. More important is the question of how you get to speak to a suitably experienced member of staff at the scheme.

xylophone

http://www.invensyspensions.co.uk/Scheme/handbook.html

The above is the current information for the Invensys Defined Benefit pension which it would seem that your father receives.

Your father may have his scheme booklet or he may have other information provided by the Trustees over the years.

From the above it would appear that your mother will receive a widow's pension in the event of your father's death - the information on any lump sum indicates

"The amount of the lump sum payable changes depending on your personal circumstances."

In particular it seems to be saying that if a pensioner dies within five years from the day he retired , the 5 x pension death lump sum will be reduced by

"all pension and tax-free cash received since you retired".

Your father has been forty years in retirement- will there be any lump sum death benefit?

Onawingandaprayer

kidmugsy wrote: »

We have had to deal with very ancient parents, so I know whereof you speak.

Ah, special snowflakes with no logic I assume. Or does that choice phrase of yours just apply to other pensioners?

mania112

xylophone wrote: »

http://www.invensyspensions.co.uk/Scheme/handbook.html

The above is the current information for the Invensys Defined Benefit pension which it would seem that your father receives.

It's amazing that companies of this size are able to produce documents that are so unhelpfully written.

Under death benefits there are 3 categories of member who qualify for a Death Benefit Lump Sum - someone still in service, someone who has left service but below retirement age, and...

Retired within 5 years of retirement

What the F does this mean?

I can only assume it means 'died' with 5 years of retirement (and this would make perfect sense, it's a 5yr guarantee, but I wanted to illustrate my point (!))

Back on topic.... No, it's unlikely there will be a cash sum to be paid but:

In addition to any death benefit lump sum which may be payable pensions are payable to your dependants.

Again, so horribly worded. I think there should be a comma in there somewhere, at least.

'Pensions are payable to your dependants'.

It doesn't say who those dependants can be. It doesn't say how much. Very helpful.

40 years is before my time, but nowadays we could probably assume it's only payable to a surviving spouse and the amount will be half whatever your father is receiving.

Best bet is to give them a call, they'd be more than happy to tell you what's what: 0191 3410600 (the administrators are called Punter Southall and this is their number).

kidmugsy

Onawingandaprayer wrote: »

Ah, special snowflakes with no logic I assume. Or does that choice phrase of yours just apply to other pensioners?

Bless them, they didn't take the view that being pensioners made them morally superior beings who were entitled to heaps of special privileges.

Linton

Drawdown has only been available for 20 years and for most of that time one would have had to have bought an annuity at 75. So he has no pension pot. What he probably has is a commitment from the pension company or trustees of a previous employers scheme to pay him the agreed steady income until he dies. There may also be some spouse benefit to be paid after his death, but that depends very much on the details of the pension.

So, yes, talk to Invensys to understand the details of his particular pension. If you havent registered a PoA with them there are likely to be various hoops for you to jump through before they will discuss your father's details with you. Alternatively if he is well enough have him next to you when you call them they can get his permission to talk to you.