Can wife's pension be transferred upon death?

Bootsox

dutchism1958 wrote: »

...Our house (no mortgage),worth £375K...

Just some food for thought:

• Have you both made a will?
  
• There are some nuances associated with how your property is held between you: http://www.mindatrest.co.uk/blog/tenants-common-versus-joint-tenants
  
• Are there any other relatives who might try to claim on your wife's estate?

dutchism1958

Thanks Bootsox,
We have both made a will and I have POA for my wife.No other relatives looking to claim and we are joint tenants of our property.

dutchism1958

Morning Jamesd,

I have read the link and understand it.

The property is in joint names as joint tenants.
We each have £2200 in 2 individual TSB accounts.
I have £61K in an iii account.
My wife £55K in an iii account.
I have a Santander account with £66K
My wife a Santander account with £24K
A joint Santander account with £33K.

Hope this helps!
thanks G

atush

No surprise, that was by far the most likely answer and also a sensible choice by her.

Not a sensible choice if you have a spouse (esp a much younger spouse) to buy an annuity w/o spousal benefits

in fact, if you had an adviser who suggested this (not that they would) it could be considered bad advice

jamesd

Thanks. That's looking pretty good for your finances both now, if care does end up being needed - it is for about one person in three - and should she die before you do and also before your pensions are in payment.

If your health is good to OK I suggest that she considers the maximum permitted Class 3A purchase using money from accounts in her name and joint name to:

1. Increase income for the household while you are both alive
2. That income to help with care costs if those do become necessary
3. And in the unfortunate but ultimately likely case of her dying before you, it will help with your own finances

But before doing this please find out from DWP how much will be inheritable, since part of the value for money basis is that you will ultimately inherit most of the higher income.

But while this should be considered, I'm not sure it is best. Please see my posts dedicated to just your finances.

I also suggest that you learn more about the peer to peer lending firms Ablrate and MoneyThing and use them for some of your cash. I have substantial amounts with both and anticipate about 10% interest after allowing for potential bad debt. Selling is fairly easy, very easy for MoneyThing, though that could always change. In the case of MoneyThing I expect that you could sell £10,000 of loans in under an hour during the day and have the money withdrawn and in your bank a few hours later. I've sold thousands worth in a few minutes, about as fast as I could offer them for sale. I expect that you could generate £10,000 a year of interest using £100,000 of your current cash. Do not use just those two, use at least four, those two would just be a good starting point.

jamesd

atush wrote: »

Not a sensible choice if you have a spouse (esp a much younger spouse) to buy an annuity w/o spousal benefits

That in part depends on how big the income reduction would be. A very big reduction seems likely for a twenty year age difference. Life insurance and single life annuity would probably offer a much better deal. Also of interest is that the younger partner was just 46 years old at the time, with presumably every reason to anticipate them continuing to build up pension and other income in their own name.

jamesd

Considering just your own situation, long term first, with all pensions in payment and no lump sums except AVC taken. It appears that you will have £8,000 state pension plus any inherited from her, private pensions of £264, £8,200 and £16,400. So total income potential of at least £32,864. It does not appear that loss of all of her financial assets if care is needed will leave you short of money.

That is far in excess of your £14,000 need so you appear to be well set up for your longer term needs.

Looking shorter term and only counting money in your own accounts, you have £129,000 and a need to bridge an eight year gap while delivering to you £14,000 or more. 129000 / 14000 = 9.21 years worth even before considering potential interest or investment gains that in practice could raise the potential to more like £20,000 a year.

On top of that you have the potential for equity release from your home and likely availability of most of her assets if she was to die early on in the period. Given those assets and no care need it doesn't seem unreasonable to plan on being able to bridge the right years at £32,000 of income if there is no care need.

So at this point I think it is likely that you already have a lot of income potential and I think another question seems most relevant:

Is there anything that you can spend money on now to improve the quality of life for either of you? Help with caring? Cruises? Home adaptations?

If you're not already spending at a level appropriate for an income of at least £32,000 a year and see any potential to benefit from spending more I suggest that you consider it.

jamesd

Moving on to care funding as a threat, let's consider the effect of perhaps £60,000 a year needed for that.

She has an income of £17,500 plus some state pension that I'll assume is £5,000. That's £22,500 so far, a shortfall of £37,500.

You have £232,000 of assets between you. For convenience I'll pretend it is all in P2P making 10%. So another £23,200 of potential income. Now a shortfall of £14,300.

In eight years your household will have another perhaps £32,000 of income. So it appears that some drawing of capital could lead to the cost of care at £60,000 being affordable without huge capital loss.

Cost of care varies greatly depending on the part of the country and needs but less than £40,000 without nursing care, but in a care home, is possible.

So, I think that care costs are not a major threat at your income and savings levels. Which means that I do not think that it is necessarily best to plan for transfers from her to you for this reason.

jamesd

Overall I think that it is likely that spending now, while you both have the chance to benefit, looks likely to be the best move, if there is any way for that to improve quality of life.

Class 3A can still make sense since it does increase income but if there is a need for capital while you can both benefit it might not be the best choice.

dutchism1958

Jamesd,

You have been burning the midnight oil!.
Firstly can I say a very big thank you from us both,we greatly appreciate the time you have taken to think this over and formulate your response to our information.
What I would like to do is read this over a few times to confirm my understanding and get back to you with any questions I have later today before we decide which actions we are going to take.
Thank You. G