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Pension beneficiaries - how to calculate lump sum death benefit

LDHarv
Posts: 15 Forumite

Hello,
I'm hoping someone could help me, any support really appreciated.
My uncle had taken out the 25% tax free amount from his pension pot but had not yet taken retirement before he died (he was still employed/in service, getting paid). How do you calculate how much is paid to the beneficiaries named on his pension portfolio?
Thank you in advance
I'm hoping someone could help me, any support really appreciated.
My uncle had taken out the 25% tax free amount from his pension pot but had not yet taken retirement before he died (he was still employed/in service, getting paid). How do you calculate how much is paid to the beneficiaries named on his pension portfolio?
Thank you in advance
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Comments
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The pension provider will give the value. If he had taken the 25% the remainder would be 3 times that amount at the date it was taken but it could have gone up or down from that date.
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So I've been reading, and it seems to be that the entire remaining amount will be paid out. Is that correct? This is an old pension, closed and just sitting. He didn't draw down on it. He was under 75 when he passed away. Whatever is left in the pot, that would be split between the beneficiaries?
Thanks again!0 -
He named his beneficiaries with no percentages?
If so, the administrators should make the payments as indicated in the form of nomination.0 -
LDHarv said:So I've been reading, and it seems to be that the entire remaining amount will be paid out. Is that correct? This is an old pension, closed and just sitting. He didn't draw down on it. He was under 75 when he passed away. Whatever is left in the pot, that would be split between the beneficiaries?
Thanks again!
It may well vary in value between your Uncle's death and it being paid out, depending on how it is invested and how markets behave.
Be aware the Trustees of the scheme have full discretion on who to pay it out to. Normally they will just follow what instructions have been left by your Uncle. Unless he has done something odd, like not leaving any to the family etc. In which case they may investigate further.0 -
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Thank you for your help. Really appreciated.
So for absolutely clarity, if there was £175K left in his pension pot after he (my uncle) had taken out his tax free allowance, that would be paid out to my mum and her brother 50/50 - £87,500 each tax free - as they are the two named beneficiaries?
Thank you all once again for your help.0 -
LDHarv said:Thank you for your help. Really appreciated.
So for absolutely clarity, if there was £175K left in his pension pot after he (my uncle) had taken out his tax free allowance, that would be paid out to my mum and her brother 50/50 - £87,500 each tax free - as they are the two named beneficiaries?
Thank you all once again for your help.
Note that it will not be a cash payment but still as part of a pension. If the Uncle was under 75 when he died then the beneficiaries can get the money out of the pension tax free. Either all at once or in stages /as a regular income. If he was over 75 there will be some tax to pay . In which case it is usually better not to take it all out at once.0
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