Pension on death

scotslad

My father passed away a few weeks ago. He only starting taking his monthly pension a few months ago.

Will there be any lump sum payable to his estate ??

He was single at death so no spouse pension.

He was 66 year old and pension was with Legal and General

Am a bit thick when it comes to pensions

Anyone help ?

AlanP_2

Sorry to hear about your loss.

Do you have any of the paperwork associated with the pension that you can have a read through?

Call L&G, they will be able to tell you how you stand, and others on here with more experience and expertise will be able to offer advice as well I have no doubt.

xylophone

Have you been in touch with Legal and General?

scotslad

They said there sending a letter out and stopping paying his pension but not got letter yet

jamesd

This depends on the particular way he was getting the income. I'll assume that he chose to buy an annuity.

Annuities can be bought with guarantee periods of various times, often five or ten years. The guarantee reduces the initial payout a little. If there is a guarantee the annuity will continue to pay out into his estate or to his beneficiaries until the guarantee period ends. As a single person he had no real need for a guarantee but he might have one anyway.

It's uncommon but it's also been known for annuity companies to refund the price if death is a short time after the sale.

One other thing to know is that usually annuities pay out in advance, so there is a chance that if there is no guarantee period they might ask for a refund for the part of the month after his death. That would be a liability for his estate to pay if it happened.

It is also worth wondering why he died so soon after buying the annuity and what type of annuity he bought. Was he in ill health? If so, was he sold an "enhanced annuity" or a standard one that makes no allowance for ill health? I'm wondering if he might have been mis-sold an inappropriate annuity type for his health. If so, it might be possible to make a complaint about that and get a refund.

scotslad

jamesd wrote: »

This depends on the particular way he was getting the income. I'll assume that he chose to buy an annuity.

Annuities can be bought with guarantee periods of various times, often five or ten years. The guarantee reduces the initial payout a little. If there is a guarantee the annuity will continue to pay out into his estate or to his beneficiaries until the guarantee period ends. As a single person he had no real need for a guarantee but he might have one anyway.

It's uncommon but it's also been known for annuity companies to refund the price if death is a short time after the sale.

It is also worth wondering why he died so soon after buying the annuity and what type of annuity he bought. Was he in ill health? If so, was he sold an "enhanced annuity" or a standard one that makes no allowance for ill health? I'm wondering if he might have been mis-sold an inappropriate annuity type for his health. If so, it might be possible to make a complaint about that and get a refund.

Yes he was in very bad health for last years with lung issues. Will have to check paperwork. All i can remember about pension that it said something like" protected pension "

McKneff

Brilliant advice there from Jamesd, please let us know how you get on.

scotslad

McKneff wrote: »

Brilliant advice there from Jamesd, please let us know how you get on.

Thanks jamesd

atush

jamesd wrote: »

This depends on the particular way he was getting the income. I'll assume that he chose to buy an annuity.

Annuities can be bought with guarantee periods of various times, often five or ten years. The guarantee reduces the initial payout a little. If there is a guarantee the annuity will continue to pay out into his estate or to his beneficiaries until the guarantee period ends. As a single person he had no real need for a guarantee but he might have one anyway.

It's uncommon but it's also been known for annuity companies to refund the price if death is a short time after the sale.

One other thing to know is that usually annuities pay out in advance, so there is a chance that if there is no guarantee period they might ask for a refund for the part of the month after his death. That would be a liability for his estate to pay if it happened.

It is also worth wondering why he died so soon after buying the annuity and what type of annuity he bought. Was he in ill health? If so, was he sold an "enhanced annuity" or a standard one that makes no allowance for ill health? I'm wondering if he might have been mis-sold an inappropriate annuity type for his health. If so, it might be possible to make a complaint about that and get a refund.

I agree there may be some hope. If there was a guarantee period or if he was sold a reg annuity without checking his health re enhanced annuity.

Given he had no spouse though, he may not have chosen any guarantees.

Good luck and let us know.

jamesd

scotslad wrote: »

Yes he was in very bad health for last years with lung issues. Will have to check paperwork. All i can remember about pension that it said something like" protected pension "

That's quite promising. Under old rules a "protected pension" was probably really a "protected rights" pension form time spent contracted out of SERPS or S2P. The old rules for those pensions required that if an annuity was purchased it had to be an inflation-linked annuity with pension for a spouse as well. Those rules were changed several years ago and from then any annuity or none could be purchased.

The things that you should look for are words like:

"enhanced" meaning that health may have been taken into consideration.
"single life" meaning no spousal pension.
"spousal" meaning a pension after his death for a spouse he didn't have.
"guarantee" would be about a guarantee period.
"guaranteed annuity rate" a possibly higher than usual annuity rate for a standard annuity that might still be lower than the rate for an enhanced annuity

You should also look for any letters sent in the year or so before taking the pension and soon after it. Rules introduced in the last few years mean that annuity sales firms are supposed to carry out certain checks but he Financial Conduct Authority has found that some firms just don't do those checks or even discouraged people from seeking the correct type of pension after the firm was told of something that made what they planned to sell unsuitable. This doesn't mean anything wrong necessarily happened to him, just that it's wise to be aware of the possibility and check. For example, if the paperwork appears to indicate it is desirable, someone here might suggest asking for a transcript and recording of any phone calls he made about the purchase to verify that correct questions were asked and that the firm behaved correctly when it got the answers to the questions.

It's still too early to say if this will come to anything. At the moment it's just about fact finding to see whether there's something that looks interesting or not.

TH1878

jamesd wrote: »

That's quite promising. Under old rules a "protected pension" was probably really a "protected rights" pension form time spent contracted out of SERPS or S2P. The old rules for those pensions required that if an annuity was purchased it had to be an inflation-linked annuity with pension for a spouse as well. Those rules were changed several years ago and from then any annuity or none could be purchased.

The things that you should look for are words like:

"enhanced" meaning that health may have been taken into consideration.
"single life" meaning no spousal pension.
"spousal" meaning a pension after his death for a spouse he didn't have.
"guarantee" would be about a guarantee period.
"guaranteed annuity rate" a possibly higher than usual annuity rate for a standard annuity that might still be lower than the rate for an enhanced annuity

You should also look for any letters sent in the year or so before taking the pension and soon after it. Rules introduced in the last few years mean that annuity sales firms are supposed to carry out certain checks but he Financial Conduct Authority has found that some firms just don't do those checks or even discouraged people from seeking the correct type of pension after the firm was told of something that made what they planned to sell unsuitable. This doesn't mean anything wrong necessarily happened to him, just that it's wise to be aware of the possibility and check. For example, if the paperwork appears to indicate it is desirable, someone here might suggest asking for a transcript and recording of any phone calls he made about the purchase to verify that correct questions were asked and that the firm behaved correctly when it got the answers to the questions.

It's still too early to say if this will come to anything. At the moment it's just about fact finding to see whether there's something that looks interesting or not.

Even based on standard annuity rates, if someone has recommended not to include a guarantee, they want shooting. A 10yr guarantee for a 65 year old makes about 1-2% per annum difference in the annuity amount you receive (in £ terms)