Beneficiary Pension Account following death of husband

pjs493

I've written a similar thread on the death, funerals, and probate board, but it was suggested that I also ask the question here. Basically I'm looking for names of institutions that offer a beneficiary pension account product that I can use to hold the ring-fenced money from my husband's pension so that I can draw on it as a tax free income when I come to retire.

My husband died suddenly and unexpectedly a few months ago. He had a private pension that he was paying into each month and I am the sole beneficiary of that pension. His financial advisor has given me several options with what I can do with the money: take a tax free lump sum, a flexi-access drawdown, or an annuity.

I'm in my 40s and have no immediate need for the money so I agree with the suggestion from his financial advisor that putting the money in a ring-fenced pot - a beneficiary pension account as the FA is calling it - seems like the most sensible option. That way it can be set aside until I reach retirement age and I can then draw money (which will not be taxable) from the pot along with my own pensions. I've been told that if I want to take either of the second two options I need a FA to do it.

My husband had his pension and stocks and shares ISA with Aviva via a small independent wealth management firm (on the suggestion of his parents years ago when he first started investing in this way - they also use the firm). The ISA will move to my stocks and shares ISA via an APS allowance transfer once Probate is granted to my stocks and shares ISA held with the investment arm of my high street bank.

My issue is that the firm charge quite high fees, they're obviously designed for people with significantly more money than my husband had invested through them (his parents built up quite a lot of wealth over the years and sold property and businesses when they retired which left them well off, so I understand why they'd go for this option, but it really didn't make much sense for my husband). I think he started using them because he knew that his parents had left everything to him and his sibling, so in the next 10-15 years (his parents are in their 80s), they'd both expect to come into quite a large inheritance. I suspect this will now all go to his sibling in its entirety.

To keep the money with Aviva and essentially change my husband's pension pot into my name and change the product to a beneficiary pension, his FA wants my to pay £750 (which is apparently a 50% reduction of their fees because my husband was already a client). There are also quite high fees for the ongoing management of the pension, both monthly and quarterly administration fees. Comparatively, my pension and ISA fees are very small.

I had hoped that the investment arm of my high street bank would have a beneficiary pension product so I could keep all my pensions in the same place, but it appears that they do not. I really want to avoid paying high fees over the next 25+ years until I retire, so I'm looking at other financial institutions that I might be able to transfer the pension to. What companies are out there that offer a beneficiary pension account product? Google searches aren't really showing any results other than answering the question of what happens to a pension when someone dies, I can't seem to find any names of institutions that offer this type of product.

dunstonh

Basically I'm looking for names of institutions that offer a beneficiary pension account product that I can use to hold the ring-fenced money from my husband's pension so that I can draw on it as a tax free income when I come to retire.

Sorry for your loss.

Most of the providers offering plans to the market today will have this as part of their normal pension offering.   Generally, its only stakeholder pensions, some workplace pensions and a few robo-providers that don't offer it.

To keep the money with Aviva and essentially change my husband's pension pot into my name and change the product to a beneficiary pension, his FA wants my to pay £750 (which is apparently a 50% reduction of their fees because my husband was already a client). There are also quite high fees for the ongoing management of the pension, both monthly and quarterly administration fees. Comparatively, my pension and ISA fees are very small.

Fees relative to value do tend to decrease with the more you have.  Many IFAs would not charge for something like this if you have ongoing servicing with them.   However, if there is not ongoing servicing then a fee would be expected and £750 seems reasonable.

I had hoped that the investment arm of my high street bank would have a beneficiary pension product so I could keep all my pensions in the same place, but it appears that they do not.

Banks that do offer it are typically more expensive than the offerings available via IFAs.   So, that wouldn't have achieved your goal of doing it cheaper.

. I really want to avoid paying high fees over the next 25+ years until I retire, so I'm looking at other financial institutions that I might be able to transfer the pension to.

Tell the IFA you don't want ongoing servicing and low charges are your primary concern.   They can then do it with the cheaper providers.   Whilst an FA cannot do that, an IFA can.

xylophone

You might telephone eg  Fidelity, Hargreaves Lansdown (or other SIPP provider), explain the position and ask about opening a SIPP to which the  inherited pension would be transferred.

See

https://www.fidelity.co.uk/planning-guidance/life-events/receiving-and-investing-inheritance/inheriting-pension/

squirrelpie

I also note that you have said "His financial advisor" and "the FA". It is important to use a independent financial adviser (IFA) rather than one tied to a particular range of products, as you might be doing.

xylophone

If you think that you need advice, you could try

https://adviserbook.co.uk/

Tick "confirmed independent" and other options when menu comes up.

Marcon

There's already a lot of info where this thread appeared elsewhere. To avoid repetition:

https://forums.moneysavingexpert.com/discussion/6497611/private-pension-beneficiary-account-product#latest