Pension and pension options

Albermarle

CaptainWales said:

I meant put £500k in over the course of my lifetime. Not a lumpsum.

Can you leave a pension in theory to anybody? You say that it can be passed on free from IHT but is that only if you leave to a spouse?

There are different issues here.

The DC pension pot is actually held in trust by the Trustees of the pension ( even though many are not aware of that) . This means it is not legally yours, so is not included in your estate, so is not taken into account for IHT calculation purposes, regardless of the beneficiaries,

If you die before 75, the beneficiaries can withdraw from the pot tax free from income tax.. If you die after 75 they will be taxed at their normal rate.

Note that legislation can change, as the tax treatment of pension pots on death is seen as excessively generous in some quarters.

The Trustees have the final say on who the pot goes to. The vast majority of the time they will follow your wishes on the Expression of wishes form.
Problems can occur if the form has not been filled in, or has not been modified to take account of changed family circumstances, or the wish was to leave it all to the dogs home, leaving dependent family with nothing.