Mum's deferred pension

ac1981

Hi everyone,

My mum passed away sadly in August. We all knew in her final two weeks she was living her final days so she organised for a solicitor to visit her in hospital to write her will.

Although she wanted everything to be split between me and my brother, the solicitor explained about inheritance tax etc... so she decided to give everything to my father and then he will share everything (gift) between me and my brother as per mum's wishes.

Anyway, so my mum retired from her full time job around 5 years ago after working for the NHS as a nurse for about 42 years. Since then was working part time, doing 1 or 2 nightshifts a week at a private nursing home, and she retired from this in April this year, literally before she got ill.

When the solicitor was with her, me and my brother were there too and my mum told the solicitor that there was a deferred pension lump sum owed to her, as she didn't take it 5 years ago when she retired.

My questions is - what is this deferred lump sum? is this different to the state pension? And how would we go about getting this lump sum. Is this a pension from the NHS or the government.

I vaguely remember my mum filling out the form maybe march/april time, and the form was asking if she wanted it in monthly payments or a lump sum. She opted for lump sum, I posted the form myself and it was never paid into her account - so maybe it got lost in the post.. who knows. She then got too sick to chase it up.

I am sorry if it's a silly question. To be honest I have no idea about pensions and how they work. Mum did try to explain it to me and my brother at the time, but obviously due to our frame of ind didn't really take it in, plus we didn't want to ask mum about it again as she was getting easily frustrated at that point.

I will be calling the department of pensions tomorrow to ask them, but I just wanted to get a better understanding of it because sometimes these government helplines can be useless!

I'm currently filling out the IHT205 form and i think this outstanding lump sum needs to be declared on there.

Thanks advance, and i hope the above makes sense.

[Deleted User]

sorry for your loss,not sure about the pensions but as i understand it if your dad gifts the money to you their could be IHT issues if he dies within 7 years,assuming that there is that kind of money involved

ac1981

woodbine wrote: »

sorry for your loss,not sure about the pensions but as i understand it if your dad gifts the money to you their could be IHT issues if he dies within 7 years,assuming that there is that kind of money involved

Hi Woodbine,
Thanks for your reply.

Yeah we are aware of the seven year thing, solicitor explained that. Thanks again.

xylophone

When you speak of a deferred lump sum are you referring to her NHS pension or her state pension or a private pension?

Was she drawing her NHS pension? Was she drawing her state pension?

xylophone

If this is to do with deferred state pension then your father should read https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/372517/dwp024-102014.pdf

ac1981

xylophone wrote: »

When you speak of a deferred lump sum are you referring to her NHS pension or her state pension or a private pension?

Was she drawing her NHS pension? Was she drawing her state pension?

Thanks Xylophone for your response.
If i am honest with you, I have NO idea. From a recent statement I can see that she was getting a regular pension payment, whether it was from the nhs pension or the state i am not sure. I'm quite sure she didn't have a private pension.

Thanks for the link, we'll have a read.

Urgh, it's all so confusing. It's one of those things, I had no idea what pension she was drawing, it's something we never really talked about until we had to near the end, and as I said no one could really be bothered to take it in at the time as we had other things on our minds.

So am I right in thinking... if I can work out from her statement where that regular pension payment was from (state or NHS), then the other one would be the deferred one? i.e if i found out that regular payment into her account was her state pension then the deferred on would be the NHS one? Sorry again if that's a silly question.

ac1981

I just googled the monthly 'payer' on her statement and it seems to be from the NHS.

jem16

ac1981 wrote: »

So am I right in thinking... if I can work out from her statement where that regular pension payment was from (state or NHS), then the other one would be the deferred one? i.e if i found out that regular payment into her account was her state pension then the deferred on would be the NHS one? Sorry again if that's a silly question.

It's not possible to defer taking the lump sum if, as you say, she was in receipt of her NHS pension. Both must be taken at the same time.

What age was your Mum? It is more likely that she deferred the state pension and there will be a lump sum payment due from that. I would suggest your Dad contacts the DWP.

jamesd

If you call NHS Pensions they should be able to confirm. There's a chance that they may decline because your father is next of kin, not you, and/or because they don't yet have proof of the death so don't know yet that they wouldn't be breaching their privacy obligation to your mother.

for the state pension I suggest that you phone the change in circumstances number for the Pension Service initially. Tell them about her death and ask them about the lump sum payment for the deferred state pension that she requested. That line might be able to deal with both or if not should be able to tell you who to contact next. A lump sum from the state pension won't be lost completely, if they just didn't get or act on the form all that would have happened is that the amount due would continue to increase until it is claimed. They might refuse to discuss the deferred state pension with you because it is your father who is entitled to the money and it is not part of her estate. But hey should at least be able to tall you who he should contact. Your father would get the choice of a lump sum taxed at whatever his highest current income tax rate is or a higher state pension.

xylophone

I'm guessing that your mother was born around 1950 and became eligible for her state pension in 2010 - she may well have chosen to defer it but to take it when she retired from her part time job in the spring at about the time she became ill.

If the form requesting them to commence payment had been received by the DWP, one would have expected her to have received the lump sum and be receiving a regular state pension - it would appear that either it was lost in the post or is still languishing in an in tray/ post sack at the DWP?

Either way, your father or your mother's executor should be contacting the DWP.

With regard to your mother's NHS pension. I am assuming that the administrator has been contacted?

LHW99

Make sure you have your mum's NI number with you when you phone DWP.

It should be on any payslip she has had.