Pension Fund Beneficiaries

chesney105

Hi Everyone
I wish to leave the remainder of my Income Drawdown Pension Fund to my granddaughters. They are aged 8 & 4. I need some advice on the best way to go about this. From what I’ve read, there are two options.....1. Move the fund into a Beneficiary Drawdown Fund with the same Pension Provider ....2. Withdraw and transfer to a Trust Fund. I’d be grateful for any advice or if someone could point me in the right direction of who to discuss this with. TIA

SonOf

I need some advice on the best way to go about this.

Simple. Make an expression of wish. Most providers have their own form for this. Ask your provider for the expression of wish/nomination of beneficiary form (exact wording varies but they will know what you are after unless they are being obnoxious)

From what I’ve read, there are two options.....1. Move the fund into a Beneficiary Drawdown Fund with the same Pension Provider ....2. Withdraw and transfer to a Trust Fund.

Neither of those things are required and they could actually create unnecessary taxation and costs.

or if someone could point me in the right direction of who to discuss this with. TIA

If you are struggling, then any local IFA.

Marcon

SonOf wrote: »

Most providers have their own form for this. Ask your provider for the expression of wish/nomination of beneficiary form (exact wording varies but they will know what you are after only they are being obnoxious)

Nothing 'obnoxious' about a provider asking a customer to complete an expression of wish/nomination form - how else would they know their preferences?

Given the ages of the children, some sort of trust would be needed to hold the funds until they come of age. One for a solicitor - not as complicated as it might sound!

xylophone

I'm not sure exactly what it is that you have in mind.

Is this simply "If there is anything left I would like them to have it"?

Or is it that you intend to cease drawing on the pension with the intention of letting the investments grow?

Or do you wish to benefit your grandchildren at some specific point in the future so that you will draw income/capital now and set up a Trust Fund?

Or do you wish to make the full annual contribution to a JISA for each child?

[Deleted User]

Marcon, I think you may have interpreted SonOf's in brackets remark differently than the intended meaning. I read it as the providers having different names/ terminology for an "expression of wish" form and they would surely know the form requested, by description given.
Regards

Marcon

rangersfc wrote: »

Marcon, I think you may have interpreted SonOf's in brackets remark differently than the intended meaning. I read it as the providers having different names/ terminology for an "expression of wish" form and they would surely know the form requested, by description given.
Regards

Thank you. I was baffled by the post, since I couldn't see what SO was driving at. Still not sure, but I guess it doesn't matter much!

[Deleted User]

Marcon, Fair enough
regards

bostonerimus

I don’t know if it’s like this in the U.K., but in the US you can usually designate beneficiaries on retirement and investment accounts online. This avoids probate and your beneficiaries can access the money as soon as you die. So maybe see if your financial companies have an online form.

chesney105

Thanks again sonof....yes the pension provider has a form I can use to nominate beneficiaries. One of the tick boxes is ...”is this person to be considered for beneficiary flexi-access drawdown”. I don’t know whether to go for this option or not. If not, then a Trust Fund is the alternative option. I realise there could be tax implications if the fund is withdrawn and transferred to a Trust Fund. My worry is that according to the information provided by the Pension Provider, the beneficiaries can make withdrawals at any time. It is my wish that the girls don’t have access to the money until they attain 25 but if they need a small amount say for educational purposes, they can have it. I don’t know what safeguards would be in place with a Beneficiary Flexi-access Drawdown as opposed to a Trust Fund managed by appointed Trustees. I don’t know whether I need to see an IFA, a solicitor or a Tax Consultant!

To the person who suggested I stop withdrawing in order to provide for my granddaughters...no I will continue to make withdrawals until my death. According to the latest info on cashflow forecasts, my Fund will last until I’m over 100! Maybe there won’t be anything left by the time I leave this world but I want to make sure I’ve got all angles covers just in case.

Thank you all for your input.

xylophone

Below may be helpful.


https://www.moneymarketing.co.uk/five-reasons-why-you-might-put-pension-death-benefits-into-trust/

chesney105

Thank you! That article was extremely helpful.