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Pension, trust fund help!

Good afternoon everyone

im new here, and no idea what time doing!! My sons father recently passed away unexpectedly , we were separated, on good terms and he had a great relationship with our son. He paid regular maintenance, had our son every other weekend and half the school holidays and contributed to all school trips, uniforms, clothing etc, as I am unable to work due to being our sons carer I had to give up my career. Our son has a rare genetic condition too which requires trips and stay to London and his dad always helped with those costs… without his monetary support I would find this impossible.  

 A few weeks ago I was contacted by his pension company and my son, who is 12, is entitled to a sum of money, more than I expected him to receive. I am currently looking at options for this money and would like to put a large sum in a trust fund for when he is 18, preferably a high interest one, but  there was also an option for regular payments meaning we would still have support for all the things his dad usually supported with. Can anyone suggest where I can look at doing this. We currently both bank with NatWest, and I know I don’t need to rush into anything, I want to take my time and make sure we are doing the right thing for us. Any help will be greatly received 

Comments

  • Brie
    Brie Posts: 13,477 Ambassador
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    Were you still named on your husband's pension as beneficiary?  If so you may be entitled to widow's pension.  I think what your son will get would be referred to as an orphan's pension if it pays out monthly.  Double check in any case if it actually stops at 18 or at a higher age due to being in further education or due to his medical needs.  This may end up being a decision that needs to be agreed by the pension fund trustees so potentially could take time (a couple of years perhaps?)

    Also check with the government bereavement funds.  There may also be some industry connections that might help given the circumstances.   

    I know this is not what you were asking about but thought I'd add it in anyways.  Sorry for your loss, even if you were separated it's good to know that it was amicable.  
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  • Brie said:
    Were you still named on your husband's pension as beneficiary?  If so you may be entitled to widow's pension.  I think what your son will get would be referred to as an orphan's pension if it pays out monthly.  Double check in any case if it actually stops at 18 or at a higher age due to being in further education or due to his medical needs.  This may end up being a decision that needs to be agreed by the pension fund trustees so potentially could take time (a couple of years perhaps?)

    Also check with the government bereavement funds.  There may also be some industry connections that might help given the circumstances.   

    I know this is not what you were asking about but thought I'd add it in anyways.  Sorry for your loss, even if you were separated it's good to know that it was amicable.  
    Thank you, no my son was the only beneficiary, we were never married, in a relationship for 10 years and separated for almost 5. It has been a really difficult time for my son, and obviously has had an affect on myself too. At the moment I think now we have had the funeral and started a new normal I feel I have to start looking at the finance side and deal with it, but it feel so lost!
  • tacpot12
    tacpot12 Posts: 9,020 Forumite
    Ninth Anniversary 1,000 Posts Name Dropper
    If the regular payment option is a fair sum, then taking that option could avoid a lot of headaches. You might need an independent financial adviser (IFA) to work out if the regular payment option is fair deal. Selecting an IFA can be difficult, so it might be worth asking around family and friends in case someone can recommend an IFA to you. 

    I think that, under the circumstances, I would suggest that you make it very clear that you will not use their services if they recommend taking a lump sum. You can always backtrack on this, but I think it would be better to suggest you have another firm in mind to manage the money if they make the case that having the lump sum - you can suggest that they can use their own fee scale as an example of what impact fees might have on the income your son would receive.

    The advice to check on how long the regular payments would continue is important, and also whether the payments would be increased to reflect inflation. The IFA will need to know the amount, duration and potential for increases to be able to value the regular payments option. 
    The comments I post are my personal opinion. While I try to check everything is correct before posting, I can and do make mistakes, so always try to check official information sources before relying on my posts.
  • pjs493
    pjs493 Posts: 560 Forumite
    500 Posts Name Dropper
    What are the terms of the pension? Do you know? 

    Will your son receive a lump sum as a death in service benefit as the named beneficiary? Will you son receive a monthly pension until he finishes school, or university, or until he reaches a specific age? Does his medical condition class as a disability? Some schemes will pay a pension for life if a child has a disability and is unlikely to be able to work or support themselves when they're an adult. Your post seems to suggest you can choose between a lump sum or a monthly pension, but I just wanted to check that your son wouldn't be entitled to both.

    When my husband died, I received a lump sum as a death in service benefit. I also receive a pension for life. Our children also get a pension until they either finish formal education or reach 23, whichever happens first. If one of them was disabled and unable to work as an adult they would also receive a pension for life.

    It might be tempting to put all the money into an account for your son to access when he's older, but make sure you take care of his immediate needs first until you find your new normal and adjust to the changes that will inevitably happen financially. I initially started putting all of our children's pension straight into their S&S JISAs, but we're going through a lot of changes at the moment with a house move, etc, and I need to make sure I have money to take care of their needs as they grow up. I tend to now calculate each month what I spend on childcare, and other big expenses for them and whatever is left over I put into their JISAs. Remember that any money placed in a JISA is locked away until a child reaches a certain age, so if you go down this route you can't withdraw the money later if you decide you need it for your son.

    I'm on long term compassionate leave so I'm not receiving an income from my job at the moment. I'm trying not to make money too tight. Once I go back to work and we move, etc, I'll go back to putting their pensions into their JISAs each month. I already have a standing order set up for each of them into their JISAs which is made up of what I receive in Child Benefit and then I add some extra and top it up to a round figure.

    I'm sorry for your loss and that of your son.
  • Marcon
    Marcon Posts: 12,971 Forumite
    Eighth Anniversary 10,000 Posts Name Dropper Combo Breaker
    tacpot12 said:
    If the regular payment option is a fair sum, then taking that option could avoid a lot of headaches. You might need an independent financial adviser (IFA) to work out if the regular payment option is fair deal. Selecting an IFA can be difficult, so it might be worth asking around family and friends in case someone can recommend an IFA to you. 

    I think that, under the circumstances, I would suggest that you make it very clear that you will not use their services if they recommend taking a lump sum. You can always backtrack on this, but I think it would be better to suggest you have another firm in mind to manage the money if they make the case that having the lump sum - you can suggest that they can use their own fee scale as an example of what impact fees might have on the income your son would receive.

    The advice to check on how long the regular payments would continue is important, and also whether the payments would be increased to reflect inflation. The IFA will need to know the amount, duration and potential for increases to be able to value the regular payments option. 
    Not a good idea. The whole point about taking advice from a qualified and independent professional is to look at all the options and then decide - not fetter them beforehand! 
    Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!  
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