Pensions and the benefits system

sammyjammy

If you've not taken any money from it yet you can take up to 25% tax free, if your ESA is income based you can have up to 16k in savings before your ESA is withdrawn completely (anything over £6k will reduce your payment), if its Contribution based you can take the 25% as a one off capital sum and it will not impact any of your benefits.

kaMelo

Wibbleone said:

Unfortunately my wife has no pensions at all.  Once I die, she will have no income at all.  We are lucky enough to own our own house.
Do I simply say "I leave my pension to my wife" in my will and it will happen?  I did not know it would be that easy.

Pensions are usually dealt with outside of someone's estate with the pension trustees having discretion as to whom they pay the money to upon the death of the pension holder.

Get in touch with the company and, if she isn't already, register your wife as the nominated beneficiary of your pension.

Alice_Holt

Wibbleone said:

Unfortunately my wife has no pensions at all.  Once I die, she will have no income at all.  We are lucky enough to own our own house.
Do I simply say "I leave my pension to my wife" in my will and it will happen?  I did not know it would be that easy.

       No, you contact your pension company and name her as your beneficiary - 

" Many pension schemes will ask you to nominate a beneficiary – who you'd like to receive your pension money if you die. This is often done using an expression of wish or nomination form, so it's important to update it if things change."

https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-problems/pensions-after-death#:~:text=the necessary arrangements.-,Nominating a beneficiary,update it if things change.


It's really important to do this ASAP,

Should you die before 75 the pension pot passes to her without any deduction of tax. So will help provide a income for her.

If you access it now (over £85 pw), this may be deducted from your ESA - so you will be entirely wasting an asset that might be very helpful to your wife in future years. You need to be absolutely sure you know what you are doing, and the impact on your benefits before taking money from your pension pre SPA. 
An appointment at Pension Wise may be helpful to you and your wife.

Other sensible steps would be be ensure you do have an up to date will (as the house will pass to her), and consider if an Enduring Power of Attorney is applicable.

Setting these measures up now, will greatly ease the burden on your wife when you pass.  


Note that if your wife is in receipt of Carers Allowance, then she will get credits towards her own state pension. 

Is she receiving CA ?

Wibbleone

I did nominate my wife to receive my pension back in August 2023.  My memory is not that good anymore and I forgot that I did this!

The pension company said that they have noted my nominee however, “the trustees of the scheme will consider any nominations, but nominations are not binding and the trustees have discretion over the payment of death benefits”.

I read this and decided that as it sounds like they have a choice over paying out a lot of money or not paying, they would decide not to pay.  Or is this a usual form of words?

Yes, she does currently receive Carers Allowance, and yes, she already has an Enduring Power of Attorney.

I am going to book an appointment with Pension Wise as this is getting a little muddling.

Many thanks to all those who have helped and offered advice.

molerat

Or is this a usual form of words?

Yes.  It basically means they can ignore your wish if you have cut out someone who is reliant on your support - for example your nomination is still to your first wife who you divorced 20 years ago and not your current wife and child - it is not a way to get out of paying.

Silvertabby

molerat said:

Or is this a usual form of words?

Yes.  It basically means they can ignore your wish if you have cut out someone who is reliant on your support - for example your nomination is still to your first wife who you divorced 20 years ago and not your current wife and child - it is not a way to get out of paying.

It also means that as payment is at the discretion of the trustees, it can be made direct to the recipient(s) and not to the deceased's estate.