SIPP for dependents, access before 55

Herbalus

My partner has recently had a bereavement as her father died, leaving a SIPP that nominated my partner as a beneficiary of the SIPP, so I understand the SIPP will pass to my partner as a pot of money. Her father was over 75 and had taken money from the SIPP as flexible drawdown. My partner is 30s and has no SIPP of her own - her pension at the moment is just workplace.

The IFA dealing with my father-in-laws investments told me that the SIPP passes to my partner outside of the estate for inheritance tax purposes, and that an expression of wish had been signed to nominate her. The IFA also says that my partner needs to open an account somewhere to hold this money, and that she can then withdraw funds from it as she wishes, subject to income tax at her marginal rate.

My question is what sort of account does she need? Is it just a general SIPP? The IFA started talking about a “dependents pension” which meant the cash could be withdrawn prior to 55, but I can’t find a provider for this when searching. I wasn’t particularly impressed with the IFA and the amount probably makes DIY more sensible (I am happy to deal with investing it if my partner chooses), so I thought I’d ask on here.

I don’t want to open a general SIPP somewhere only for them to tell us pension money can’t be accessed until 55 (will be 57+ by the time we get there) as that’s my understanding of any pension I’d open and put my own money in.

dunstonh

My question is what sort of account does she need? Is it just a general SIPP?

Any pension that accepts beneficiary drawdown.  That will be virtually all SIPPs, most modern personal pensions and some robo-providers and workplace schemes.

Fermion

dunstonh said:

My question is what sort of account does she need? Is it just a general SIPP?

Any pension that accepts beneficiary drawdown.  That will be virtually all SIPPs, most modern personal pensions and some robo-providers and workplace schemes.

Don't understand this. Surely it doesn't have to be a beneficiary's personal pension scheme as the value won't contribute to the individual's lifetime limit. Isn't this just a drawdown account? That's the advice that I was given by an estate planning advisor.

xylophone

https://www.youinvest.co.uk/pensions-and-retirement/accessing-your-pension/sipps-and-death

Novice_investor101

Fermion said:

dunstonh said:

My question is what sort of account does she need? Is it just a general SIPP?

Any pension that accepts beneficiary drawdown.  That will be virtually all SIPPs, most modern personal pensions and some robo-providers and workplace schemes.

Don't understand this. Surely it doesn't have to be a beneficiary's personal pension scheme as the value won't contribute to the individual's lifetime limit. Isn't this just a drawdown account? That's the advice that I was given by an estate planning advisor.

Most modern SIPPs accept inherited pensions & facilitate drawdown. It will have to be opened in the beneficiaries name & the cash moved from the deceased’s pension to the beneficiaries new SIPP, set up specifically for receiving the inherited pension (assuming they don’t already have a SIPP in their own name that would accommodate it. 

It will be available for drawdown immediately the cash is in there, no waiting til age 55/57. 

Albermarle

Novice_investor101 said:

Fermion said:

dunstonh said:

My question is what sort of account does she need? Is it just a general SIPP?

Any pension that accepts beneficiary drawdown.  That will be virtually all SIPPs, most modern personal pensions and some robo-providers and workplace schemes.

Don't understand this. Surely it doesn't have to be a beneficiary's personal pension scheme as the value won't contribute to the individual's lifetime limit. Isn't this just a drawdown account? That's the advice that I was given by an estate planning advisor.

Most modern SIPPs accept inherited pensions & facilitate drawdown. It will have to be opened in the beneficiaries name & the cash moved from the deceased’s pension to the beneficiaries new SIPP, set up specifically for receiving the inherited pension (assuming they don’t already have a SIPP in their own name that would accommodate it. 

It will be available for drawdown immediately the cash is in there, no waiting til age 55/57. 

I presume it would not be possible to transfer a beneficiary pension into an existing SIPP. You would have one part of the SIPP available for immediate withdrawal and one not. Somewhat difficult for the provider to handle I guess.

dunstonh

Don't understand this. Surely it doesn't have to be a beneficiary's personal pension scheme as the value won't contribute to the individual's lifetime limit. Isn't this just a drawdown account? That's the advice that I was given by an estate planning advisor.

It will be classified as beneficiary drawdown (names may vary with providers).   "just a drawdown account" is not the same thing as that goes towards the lifetime allowance for the individual.  Whereas beneficiary drawdown does not.  So, it will be need to be segregated.  Tehre are other things you can do with beneficiary drawdown that cannot do with just drawdown.