Did you know that in 2015 changes were made to pension death benefits. This means that should you die before the age of 75, you may be able to pass your pension to a nominated beneficiary tax-free and if aged after 75, your pension pot could be drawn by a beneficiary at their own marginal tax rate; provided of course that your pension scheme allows for this level of flexibility.
The pension death benefits can either be provided as a lump sum, drawdown or an annuity. If benefits are paid as a lump sum, those benefits would form part of your beneficiary’s estate. Therefore, you may wish to consider ‘dependents drawdown.’ This would allow your beneficiary to continue to enjoy the tax advantages associated with investing in a pension, whilst permitting an allowance to be ‘drawn’ as and when needed. There may also be an additional benefit that the fund could then be passed on to their own beneficiaries. It is necessary that any death benefit nomination forms are reviewed to include beneficiaries.
For a Free initial consultation with one of our pension specialists, please contact us now, to see how we can help you.