Help with Beneficiary Drawdown Option

AB188

Hi, I have just been informed, yesterday by Standard Life Bereavements, that I am to receive 50% (my sister the other 50%) of my deceased dad's SIPP.  It has been offered with a choice of either a lump sum, a drawdown, an annuity or to transfer it to an existing pension pot.

Im a bit confused as I cant find any information as to whether a drawdown would be the same as if it was my own pension (i.e not a beneficiary one); I have an appointment with Pensionwise over the phone in two weeks time (earliest I could get!).  All I want to know is whether the drawdown would allow a 25% lump sum and whether I could withdraw the funds at a time in the future if I wanted to.  Ive asked the questions in response to their email, but they take two weeks on average to reply to correspondence, and if I try and talk to Standard Life Pensions, they can only tell me information as if it was my own pension I had set up. 

Any info/advice would be greatly appreciated.   

Marcon

AB188 said:

Hi, I have just been informed, yesterday by Standard Life Bereavements, that I am to receive 50% (my sister the other 50%) of my deceased dad's SIPP.  It has been offered with a choice of either a lump sum, a drawdown, an annuity or to transfer it to an existing pension pot.

Im a bit confused as I cant find any information as to whether a drawdown would be the same as if it was my own pension (i.e not a beneficiary one); I have an appointment with Pensionwise over the phone in two weeks time (earliest I could get!).  All I want to know is whether the drawdown would allow a 25% lump sum and whether I could withdraw the funds at a time in the future if I wanted to.  Ive asked the questions in response to their email, but they take two weeks on average to reply to correspondence, and if I try and talk to Standard Life Pensions, they can only tell me information as if it was my own pension I had set up. 

Any info/advice would be greatly appreciated.   

How old was your father when he died - had he reached his 75th birthday?

dunstonh

Im a bit confused as I cant find any information as to whether a drawdown would be the same as if it was my own pension (i.e not a beneficiary one)

Technically it is not the same, which is why it cannot be merged in directly with yours (although some providers can segment all the different rights under a single master account number but show each segment separately).

However, apart from that and tax, it would work the same way as a crystallised fund.     Note Marcon's question about age as the answer to that will dictate that taxation when drawn.

DRS1

The 25% tax free lump sum will not apply but if he was under 75 when he died the whole thing is free of income tax.

poseidon1

OP seems to me your question was largely dealt with in your post 6 months ago - see below

https://forums.moneysavingexpert.com/discussion/6591794/help-with-inherited-pension#latest

You seem mainly interested in 25% TFC. No tax free cash entitlements your father died after age 75.

AB188

Hi sorry, yes he was 77 when he died.  I forgot to mention that.

Marcon

poseidon1 said:

OP seems to me your question was largely dealt with in your post 6 months ago - see below

https://forums.moneysavingexpert.com/discussion/6591794/help-with-inherited-pension#latest

You seem mainly interested in 25% TFC. No tax free cash entitlements your father died after age 75.

OP - is your sister is claiming any means tested benefits?

The whole area of means tested benefits and pensions can charitably be described as ridiculously complex, as this thread demonstrates: https://forums.moneysavingexpert.com/discussion/6610482/civil-service-pension-tax/p1)  

Do remind her that if she is claiming, she needs to declare her inheritance to DWP https://www.gov.uk/report-benefits-change-circumstances - and also her local authority if she's claiming council tax reduction. That applies even if she hasn't yet accessed the cash - she has still become entitled to it. Far better to avoid any chance of having to sort out the mess which could result from claiming benefits to which she is no longer entitled - and of course avoiding any chance of being accused on benefit fraud.

xylophone

https://www.gov.uk/tax-on-pension-death-benefits