Tax liability for widow on husbands pension?

Tight_Fart

This is asking for a friend.
Her husband died around 10 years ago, he would now be 55, his widow is now 48.
She has recently been contacted by a pension company to discover her husband had a forgotten pension with a value around £85k.
What’s the tax implications for her on that, she’s on very low income around £12pa?

Marcon

Presume this is a DC pension and the £85K is the value of the 'pot'? If so, it can be paid out tax free to the widow.

Usual caveat: check this is real and not a scam.

TBC15

Could she keep the pension in place and start drawing it down tax free over a number of years?

xylophone

https://www.thisismoney.co.uk/money/pensions/article-3503048/I-inherited-pension-pot-relative-do.html

she’s on very low income around £12pa?

Is she on means tested benefits?

If so, might it be better not to access until she has to at PC age?

Might be worth a question on the Benefits board.

garmeg

xylophone said:

https://www.thisismoney.co.uk/money/pensions/article-3503048/I-inherited-pension-pot-relative-do.html

she’s on very low income around £12pa?

Is she on means tested benefits?

If so, might it be better not to access until she has to at PC age?

Might be worth a question on the Benefits board.

That may be a valid point if it were her pension originally. This is a spouse pension though, so I am not sure the same choice applies?

xylophone

so I am not sure the same choice applies?

Neither am I - question on benefits board might throw some light.

Albermarle

Tight_Fart said:

This is asking for a friend.
Her husband died around 10 years ago, he would now be 55, his widow is now 48.
She has recently been contacted by a pension company to discover her husband had a forgotten pension with a value around £85k.
What’s the tax implications for her on that, she’s on very low income around £12pa?

I would ask your friend if you can see the paperwork and who exactly is contact her and who the pension company is .
Although it is entirely possible that the pension has been completely overlooked , I think some extra checks it is not something dodgy would be sensible.

badmemory

Be cautious.  From what I have read they don't normally start actually looking for people until they are approaching 75.

Albermarle

badmemory said:

Be cautious.  From what I have read they don't normally start actually looking for people until they are approaching 75.

Often the pension company has an indicative age on their records of when you plan to retire ( default is usually 65) . They usually start to contact you a few months before that .

Tight_Fart

Thanks for the above, happy that it’s genuine, should have read £12k per annum.