Any experience with Legal and General Pensions?

tasticz

Has anybody got any experience with legal and general pensions? My father had a small investment as part of his pension worth around £20k - £25k. 

Are they likely to ask for probate for such amount? I can't find their policy like banks who state no probate required if up to £50k. I believe my father had filled one of the forms which stated my mother would be the beneficiary...

How long is a reasonable time for them to respond once I fill the initial paperwork and provide the required documents i.e. death certificates, marriage certificates, etc.

Ganga

I always thought that pensions were not part of the estate

tasticz

Ganga said:

I always thought that pensions were not part of the estate

Oh really? It was a pension pot he put money into... 


Edit: thanks for this. You are correct. It seems pensions do not form part of the estate.

Legal and General asked for a copy of Will on their forms...which I have provided... not sure why they wanted that as pensions seemed to be dealt sith beneficiary forms / expression of wishes form

badger09

tasticz said:

Ganga said:

I always thought that pensions were not part of the estate

Oh really? It was a pension pot he put money into... 


Edit: thanks for this. You are correct. It seems pensions do not form part of the estate.

Legal and General asked for a copy of Will on their forms...which I have provided... not sure why they wanted that as pensions seemed to be dealt sith beneficiary forms / expression of wishes form

AFAIK Expression of Wishes are not legally binding and pension trustees/administrators have the final say.
https://www.moneywise.co.uk/pensions/retirement/why-you-need-will-your-pension

https://www.retirement-planner.co.uk/233079/rp-case-studies-why-expression-of-wish-forms-are-crucial

Frogletina

My son died last September with no will.

I found Legal and General very easy and efficient to deal with, but it was a very small amount  (under £300). I received a cheque within a month. They only wanted his death certificate.

This was in contrast to Fidelity. That was for under £500. I had to send my husband's death certificate ( he had adopted him when we married). Then they asked for his adoption certificate. Then they wanted details of his siblings, then they asked if he had any living grandparents. 

Only then were they happy to send a cheque to me.

tasticz

got the initial acknowledgement confirming they have received the paperwork via email. Lets see how long before they come back. will keep you guys posted

tasticz

Still waiting for response from L&G. Found some more paperwork.

The pension was a group stakeholer pension and invested in L&G UK Equity Index Fund.

Does anyone know if we have the right to ask for stock units instead of lump sum from the pension company? The market is down nearly 23% in comparison to February 2020 and we think it will possibly go back up in the future (we are willing to take that chance if given an opportunity)!

If yes,
How will the transfer work? Will they just create a new account and transfer the stock units to my mothers name? Can she cash out whenever she wants?

How will taxation work for the future when we come to sell assuming at a higher price?

Anybody shade some light please

AnotherJoe

A few points.

I dont think they will transfer units soemwhere (an ISA? a pension in her name?) , but even if they did, L&G UK Equity would be a terrible place to be invested.

And if they didnt transfer units, theres nothing to stop her just buying those specific shares again.......  but i woudlnt, shares dont follow the what goes down must come up rule,  theres a hundred other things you can invest in that woudl be better (have more chance of going up) than a mediocre fund invested in 5% of the world..

And if your mother took the cash and put as much of it into a pension as she could, (is she working?) she'd then get the 20% uplift which she wouldnt as a direct xfer into her pension (if that possible, no idea if it is).

Pensions (and isa's) dont suffer from CGT so as long as the cash / units go into a pension or isa the last question is moot .

tasticz

AnotherJoe said:

A few points.

I dont think they will transfer units soemwhere (an ISA? a pension in her name?) , but even if they did, L&G UK Equity would be a terrible place to be invested.

And if they didnt transfer units, theres nothing to stop her just buying those specific shares again.......  but i woudlnt, shares dont follow the what goes down must come up rule,  theres a hundred other things you can invest in that woudl be better (have more chance of going up) than a mediocre fund invested in 5% of the world..

And if your mother took the cash and put as much of it into a pension as she could, (is she working?) she'd then get the 20% uplift which she wouldnt as a direct xfer into her pension (if that possible, no idea if it is).

Pensions (and isa's) dont suffer from CGT so as long as the cash / units go into a pension or isa the last question is moot .

Thanks for your response.

Assume, we take cash. My mothers take home pay is say £25k per annum and she pays £2.5k in taxes. She can put £10k into her private pension from the money in her bank acc and tells the pension company to claim the £2.5k from HMRC resulting in her having £12.5k in her pension pot? Is this correct?

Can this approach be used for taxes paid for dividends / property rental income also?

Marcon

tasticz said:

Assume, we take cash. My mothers take home pay is say £25k per annum and she pays £2.5k in taxes. She can put £10k into her private pension from the money in her bank acc and tells the pension company to claim the £2.5k from HMRC resulting in her having £12.5k in her pension pot? Is this correct?

Can this approach be used for taxes paid for dividends / property rental income also?

She doesn't need to tell the pension company anything - it will happen automatically. They will reclaim tax at the basic rate and  add it to her pension pot, so £10K becomes £12.5K. She could contribute more and the provider could still claim basic rate tax and add it to her pot, even if the amount they claim is more than she has actually paid in tax. She is limited to her gross earnings + tax relief i.e. £20K* (and if she pays tax at 20%) + £5K = £25K in her pension. 

'Earnings' does not include dividend income, interest or property rental income. If she has any other earnings, she can contribute a maximum of £40K* including the tax reclaimed on her behalf. 

*Any employer contributions would need to be taken into account when calculating the most she could pay in - the limits above include any employer contribution.