is lifestyling of pensions worth it if you are not planning to take out an annuity?

Albermarle

peteasa said:

Anything to do with inheritance is complicated!

Albermarle said:

A pension pot remains outside your estate, so is not included in inheritance tax calculations at whatever age you die. ( under current rules anyway)

Main take away from this is to check what the rules are!  https://www.gov.uk/tax-on-pension-death-benefits tells me that :

You do not usually pay Inheritance Tax on a lump sum because payment is usually ‘discretionary’ - this means the pension provider can choose whether to pay it to you.

Ask the pension provider if payment of the lump sum was discretionary. If it was not, you may have to pay Inheritance Tax.

So under current rules the pension pot may or may not be part of the inheritance tax calculation... it depends.... and yes the rules can change at any time so keep monitoring what is going on!

AFAIU, all DC pots are held in trust, so the payment is always discretionary.

However there maybe some unusual exceptions, as pensions often have quirks. If there are I think they must be few and far between/special cases.

LHW99

Albermarle said:

peteasa said:

Anything to do with inheritance is complicated!

Albermarle said:

A pension pot remains outside your estate, so is not included in inheritance tax calculations at whatever age you die. ( under current rules anyway)

Main take away from this is to check what the rules are!  https://www.gov.uk/tax-on-pension-death-benefits tells me that :

You do not usually pay Inheritance Tax on a lump sum because payment is usually ‘discretionary’ - this means the pension provider can choose whether to pay it to you.

Ask the pension provider if payment of the lump sum was discretionary. If it was not, you may have to pay Inheritance Tax.

So under current rules the pension pot may or may not be part of the inheritance tax calculation... it depends.... and yes the rules can change at any time so keep monitoring what is going on!

AFAIU, all DC pots are held in trust, so the payment is always discretionary.

However there maybe some unusual exceptions, as pensions often have quirks. If there are I think they must be few and far between/special cases.

To maintain the discretionary bit, I believe you have to give the pension co. an "expression of wishes" and NOT mention the pension in your will.