Private pension passed down?

Missbux

My late father had a few private pensions which then got passed down to my mother. She has recently passed away and I have made an enquiry about if it now gets passed down again to their children. I was told because my father didn't choose this as an  option when he first set up the pensions,we are not entitled to any of it. Can anyone offer any advice, I don't think this seems right, that my father paid in for so long to then loose it all. Is there anything I do?
TIA.

dunstonh

Can anyone offer any advice, I don't think this seems right, that my father paid in for so long to then loose it all. Is there anything I do

Sorry for your loss.

When your father retired, he had a range of options to choose from. 
1 - keep the pension invested and draw from it. Any fund remaining on his death would be inherited by his beneficiary. The beneficiary could decide to keep it a pension and it would pass on with their death.    Before 2015, this option was normally only used by people with larger funds.  Nowadays it is the main option used.
2 - exchange the pension for an annuity.   The annuity would pay a guaranteed income for life but would cease on his death.  He could add in further death benefits, such as a spouse pension or continue to pay for x number of years or return the original purchase price minus the amounts paid out so far.   The greater the death benefits selected, the lower the income figure was.

It sounds like your dad selected an annuity with spouse being the only death benefit.  This would have paid him a greater income but would cease when both of them died.

There is nothing that can be done as the death benefit choices and method of income are choices made by your father.  

Linton

Were these pensions in payment - eg was you father receiving a income each month and after his death your mother continued to receive a smaller income?   Or are you talking about a lump sum pension pot?

From what you say I assume it is the former, ie an annuity.  A private pension pot can be passed on.

When you father set up the annuity he would have had the option of receiving X per month and nothing to your mother or Y per month and Z to your mother on his death.  Obviously Y is less than X.  Normally there is no option for non-dependents and even if there were it is certainly possible that your father would want to maximise his and your mother's income.

Annuities work like an insurance scheme.  They are based on average lifespan so those people who die young lose out so that those who die late can be paid no matter how long they live.  Just like people who never have an car accident pay for those who do.

Ganga

It might be that your father paid in a certain amount and the pension administrators calculated the cost to the scheme including paying a spouse who survived them ,but if they are going to carry on paying dependants or children of the same where is the money going to come from ,with most schemes there are rules for payments and people sign up for them as it suits their lifestyle choice.

Albermarle

It depends on the type of pension .
It sounds like  they were ones that paid a guaranteed income every month ( a defined benefit or final salary scheme or maybe an annuity) then usually a spouse would get a % of the pension after death of the original pension recipient( typically50%) but once they died that would be the end of it.
He did not loose it all - he was paid a pension whilst he was alive and would have continued to be paid if he had lived to a 100. Then his wife was also paid for a while.
That is how these pensions work , the ones that die early pay for those who die very old .