Deceased husband - pension pot options

cjking

Here is an article from the Financial Times confirming that she can take a tax-free income from the pension, starting immediately.

The beneficiary is not required to wait until age 55 to dip into their inherited pension pot. He or she can do so at any age using the new flexibility to draw as much or as little as they choose. If the person they inherited it from died before the age of 75, it can be taken tax free.

https://www.ft.com/content/2c931b84-c720-11e4-9e34-00144feab7de

kidmugsy

Linton wrote: »

AIUI the problem is that the OP has the choice of either taking the pension as is and receiving the benefits 100% tax free when she reaches 55 or taking it all out of the pension environment now. If she needs access to some of the money prior to 55 she cant keep it in the pension.

Oh not you too, Linton. From my Scottish Widows link:

DEATH BENEFITS WHERE A MEMBER DIES PRE AGE 75
A member will be able to nominate any beneficiary and payments to that individual will be made free of tax, whether it is:
• taken as a lump sum
• accessed through drawdown or
• paid to a dependant or not.
The nominated person can take the benefits as they choose either as a lump sum or a regular or flexible income. All withdrawals would be free of tax.

OK? The widow can take the money now, and take it as a tax-free annuity, or tax-free lump sum, or tax-free drawdown.

kidmugsy

Here's the Pru on the subject:

"If you die before taking anything from your pension, your beneficiaries will usually be paid it as a tax-free lump sum.

Unless you die at age 75 or older, if it!!!8217;s less than the Lifetime Allowance (£1 million in the 2017/18 tax year) and the scheme is notified within two years of death, it will be paid tax-free.
The way that you pass on your pension when you die mean that:

If you die before age 75:

Your pension can be paid to your beneficiaries tax-free, either as a lump sum, an annuity, or through flexi-access drawdown."

OK? The poor girl has just been widowed, we really shouldn't risk confusing her with erroneous posts.



https://www.pru.co.uk/pensions-retirement/help-guides-and-articles/pass-your-pension-on/