Can wife's pension be transferred upon death?

jamesd

Heart attack and stroke so recently may well make the insurance options prohibitively expensive. Still worth checking but the answers may not be good.

The best time to take a defined benefit like final salary pension is usually the normal retirement age for the scheme. Sometimes there is no increase for waiting longer than that. Sometimes the reduction for taking it early isn't much, other times it can be very bad, depends on the scheme so you'll have to check with them.

If we know more about your assets and those you may inherit as well as your anticipated income need if living alone we might be able to estimate your potential income levels for various contingencies.

Your biggest financial threat at the moment may be that she might end up needing to stay in a care home for many years. That could eliminate much of the potential value of what you might otherwise inherit to use to maintain yourself. It's now too late for her to give away her assets to prevent this, that option vanished with the heart attack and stroke which made the potential need too personally foreseeable for her.

Triumph13

Have you looked into class 3A pension top up for your wife? I believe, based on her age, that you would stand to inherit 100% of any top up provided you don't get widowed and then remarry before you reach state pension age. She can buy up to £25 a week of additional state pension at an 'actuarially neutral' cost for an 80 year old - which would be a fraction of the cost for someone younger. Someone on here may be able to advise more accurately or it may be worth talking to the pension advisory service to confirm the inheritability rules, but I believe the offer only runs until 5 April this year.

dutchism1958

Thank you Triumph13,I'll have a word with them.

dutchism1958

Thank you jamesd.

My anticipated income needs would be about £14K per annum.
I have 3 final salary company pensions which mature when I am 66.
One worth £22 per month.One worth £8200 per annum or an option to take a lower sum of £6450 with a lump sum of £29,670.And one worth £16,400 with an AVC lump sum of £17700 or an option of a £12,100 pension with a lump sum(main plan)of £63,100 and AVC of £17,700.

Our house (no mortgage),worth £375K.
We have no debts.
Cash £127K in various interest paying bank accounts and £105K in S&S ISA's.
I have nothing else to inherit.
Thank you very much for looking at this,any suggestions gratefully received.

kidmugsy

dutchism1958 wrote: »

Unfortunately my wife's health is not the best following a big heart attack and this year a stroke so deferring her state pension is probably a non-starter as you suggest.

I'm not confident that your assumption is sound. My health record is poor but I'm deferring because I calculate that in my case my wife will inherit 90% of the extra state pension due to me. It may pay to look into this further with your IFA. It's conceivable, however, that social services will look upon your wife as deliberately depriving herself of assets if she deferred. I'm no expert on that, though.

jamesd

Class 3A and deferral inheritance rules are essentially the same, both largely inheritable. One advantage of the Class 3A approach is that it is a legal way for her to effectively give away some of her savings even if she does later need care. Both have the disadvantage that nothing is payable until the person inheriting reaches their own state pension age and nothing at all if they remarry or form a civil partnership before that, after is OK.

At 80 Class 3A still pays a little less than state pension deferral but it has the advantage of being doable as a lump sum so it can fit this situation well.

As kidmugsy wrote, deferral can still be appropriate, it just takes a bit more checking first. That 90% inheritable figure may well apply for your wife as well, in which case both it and Class 3A would look like good deals. I don't think that deprivation of assets would be a factor because the first thing it does is add to her own income at quite a generous rate.

jamesd

How is ownership of this assets split between you? With her health that is important. On the raw numbers you should be fine, just depends on what happens if she need care and how much of it all is in her name.

dutchism1958

All of our monies are shared.Obviously we do have individual accounts and S&S ISA's in our own names but it is not a case of his and hers, there is complete transparency and therefore in this case flexibility for us.

jamesd

Unfortunately that partly ceased to be the case the moment it became foreseeable that she might need care. From that moment anything taken from an account in her name and passed to you is subject to the deprivation of assets test if she needs care, which roughly means that it will be treated as if the transfer never happened. For joint accounts, half of the balance.

At the moment it's very important to know in which names everything is and to try to avoid transferring into things in her name or that are joint. With that knowledge it's possible to plan to try to protect you from the possible effects of the care means testing.

Fortunately the benefits rules will not treat everything as communal assets. If they did, everything in your own name could also be taken before the council starts to pay.

Age UK has a guidance leaflet linked from here. Please read it so you will have a better idea of why we need to pay a lot of attention to whose name each thing is in in case she does need care. Else her care needs could end up leaving you poorer until your own pensions start, and poorer than necessary afterwards.

dutchism1958

thank you jamesd,I'll read through the link provided tonight and get back to you tomorrow with the details of ownership.
We both appreciate this.