Retirement Planning - Pension Death Benefits
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- เผยแพร่เมื่อ 28 พ.ค. 2024
- #meaningfulmoney #meaningfulacademy #retirementplanning
What are the benefits of retirement planning after your death? It probably won't surprise you to know that 'it depends' but in this video I want to give you the answers so that you can plan for the worst case and make sure you have everything in order.
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00:00 Welcome
00:43 Intro
01:02 DB pensions intro
01:49 DB pensions pre-retirement
03:45 DB pensions post-retirement
04:33 DC pensions intro
04:51 Dependants, Nominees and Successors
05:53 The form of the death benefits
08:06 What about tax?
09:08 Summary
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Plenty to think about Pete so thank you very much for raising once again many valuable points 👍🏻
Hi! 40 + years of final salary here with local council, if I were to die would my wife receive my full pension payment? If not am I best transferring my pension to a sipp so she can have it all
Another great video, excellent way of explaining the pre/post 75 death rules.
very good pete
Great content
Very technical, but clearly explained and understood. Sent to my friend who i was recently discussing pensions and death with. Yep.
Excellent video thanks. I like it when you do images / charts to show the position as you explain the variables. As we know, tell it and then summarise at the end with a chart would be brilliant!! Eg the tax position re LTA pre and post death at age 75. This topic is relevant to many people these days!! Very well done for addressing this in your excellent succinct way!!
Great video, I actually made a comment a few weeks ago about pension pots from DC schemes being part of your estate and you corrected me.
I have already checked my main DC scheme and no beneficiaries are listed they did advise they would normally follow instructions in a will or pass to the spouse. I will potentially have some to leave for my kids but the aim is to spend it on living. I have no intention of not being able to afford to heat the house when I retire
So glad TH-cam recommended you in my feed. Absolutely love your down to earth and tongue-in-cheek delivery.
Thank you, David! Really glad to have you here!
Great job 👍 easy to understand
Thanks Stephen!
Another great video Pete, keep up the good work. I bought your book, money well spent .
Very kind, thank you! 👍🏻👊🏻
It would be really helpful for some examples in your videos, and explaining specific terms used in the industry i.e crystalline?
The problem, Pete, and in the U.K. particularly, is the tens of millions who have no savings, no pension of substance and no assets at all. While we appreciate that your income is derived from managing the pensions of the few, who have been lucky via employment to benefit from final salary schemes, the majority who have not been enrolled early enough in any pensions at all, primarily by working for smaller private companies where there was no obligation to provide a pension at all, are now in an underclass who will retire in poverty. Most pension advisors I have met, will not get out of bed for someone, unless they have at least £250k in a scheme or with realisable assets. Unfortunately, no UK government can provide a solution for those who have little or no wealth on retirement. The only solution for those, is to work until they die, as it’s the only way to stay fed, watered and paying rent in London. How have I reached this conclusion? I am living proof!
All employers, regardless of their size, must provide access to a workplace pension scheme. This happened under Automatic Enrolment legislation. Most employees (workers) are also entitled to a pension contribution from their employer. It’s never too late to start saving in a pension, but the earlier they start the better.
@@iain8567 Yes but he is refering to when auto enrolement did not exist....
Any videos on Executive pension plans and the death benefits if plan was pre 2006
Well, funds will be remitted to my account.
Too many new words. Adulting is hard. 😵💫
When pension trustees deliberately and knowingly delay paying out to nominated beneficiaries of someone who died under 75 until after the 2 year tax free claim deadline can you sue them for the tax loss ?
Very helpful video, thank you so much. I have two basic (I think!) questions, if you have the time to respond. Both are related to the situation where the pension is disbursed as a lump sum - no pension, annuity, or drawdown involved. No dependants involved - no spouse, children, etc.
Q1: I was struck by the implication that for a DC pension, a specific person or set of people would be named to benefit from the DC amount after the pension-holder's death. Can a pension simply be left to an estate, and distributed to the various people listed in the will (e.g., let's say the estate is left to 4 people according to specific proportions - say 50%, 20%, 20% and 10%)? And if so, would the pension be exempt from IHT if the total estate (including the pension) exceeds the IHT threshold? (Assume the rest of the estate is < IHT threshold)
Q2: Similar situation to the above (estate specifies the estate to be left to the 4 people proportionally). Would an expression of wishes lodged with the DC pension company, with a specified nominee, fall outside of the specifications of the will? So, say the pension-holder says all of the DC pension lump to be paid to person E (where persons A, B, C and D are the 4 people the remainder of the estate is left to)?
Thanks for any feedback - I'm enjoying the plain-speaking videos!
ahh the beautiful realms of RO4 pensions exam. Thank you for this video sir
So I can take a lump sum from my pension then still pass the residue at my death as draw down? It's just that any pass down involving lump sum or annuity stops that pass on process?
Thanks for this very informative video Pete. Regarding your comments 08:50 into the video, what happens if my nominee earns less than £10k pa and therefore pays 0% income tax but the amount of my pension they would inherit is £50k. Would the £50k of my pension turn them into a higher rate tax payer and get them charged 40% tax on it or would they pay 0% tax based on their income before inheriting my pension? If it would turn them into a 40% tax payer, could they take my pension in chunks over a period of years to avoid going into a higher tax bracket?
I have a reserved RAF pension, payable at 60, an old and currently not being used, private pension, a workplace pension and possible, state pension. Not good to say, but I really have no idea what I should do with any of these, if anything at all. A very difficult area of finance to navigate.
Hi Pete great advice...can i leave my pension to my brother or sisters..please someone if you can let me know..is it possible thank you...
I'm too distracted by the Levi T-shirt to concentrate on this video. I can't remember seeing you wear anything other than Crew branded clothing!
Hahhahhahahhaha! I like to MESS WITH YOU!
Excellent video thanks very useful. If someone who died before age 75 had an occupational pension scheme and they were drawing pension, will the pension pot attract any IHT or is it free of IHT. Thank you
If it’s a scheme which is paying a guaranteed income, then the income will likely stop when they die, or be paid at a reduced rate to their spouse or partner. Either way, no IHT issues. If it’s a fund (a pot of money in their own name) from which they are drawing an income then if they die before age 75 it can be paid tax-free (all taxes,inc IHT) to their beneficiaries. There are often little wrinkles and scheme-specific rules, so check with the scheme itself to be sure.
@@MeaningfulMoney Thank you for your prompt reply
can you take the remainder of your pension after you have started getting your pension
Much simpler in the case of a single person who does not have any dependents - you can't leave your pension in to anybody (e.g., a sibling), despite having contributed at the same rate as those with spouse, partners and/or dependents.
Depends what kind of pension. If it’s a DB scheme, then you’re right, which doesn’t seem fair. But with a DC scheme that’s definitely not the case.
@@MeaningfulMoney yes, I did mean DB. Makes sense that you'd get more flexibility with DC.
Hi thank you so much this is very helpful, I am became a
Widow 6 months ago , not sue what to do with his pension. I know his private pension will be over the current LTA by 150k what is the tax on it if I took the lump sum ? Or if I transfer the whole lumps sum into my name it can pass it on to my only child when I pass away ? I am very lost I never work I really don’t know what is the best to protect me and my child. If i take the monthly draw down for £1000 will that be the best option that I don’t have to pay a very expensive tax for over the LTA limited ? Thank you I. Advance
Hi Pete ,great video. Are the pension dividends received taxed the same as withdrawing from your pot? Thanks
Cheers Steve. You generally don't take dividends out of a pension in a 'natural income' form as you might from say, an ISA. ANYTHING drawn from a pension, after the tax-free cash, is taxable as income, whether you take ad hoc lump sums, a regular or variable income, or whatever. Think of the dividends as being rolled up into the pension and you're just opening the tap and taking out what you want, and you'll be pretty near the mark.
@@MeaningfulMoney thanks for your reply. You explained that perfectly, thank you.
I am single with no children. My brother will be my beneficiary but no longer lives in the UK and has no presence/bank account/tax bill here. He has three children. Will he be able to benefit from my pension when I die? Thanks
My government pension from the US military and Veterans benefits will die with me. At 62 or 65, i will qualify for my Social Security pension. Im divorced and my son is an adult, so one will benefit from my pension. My son will inherit my TSP savings and what ever money left in my account and a large life insurance.
Great video. One question. Can nominees be organisations like charities? If so any tax implications.
You can definitely nominate a charity as a beneficiary. Shouldn’t be any tax implication whatsoever, but seek legal advice to be sure, or ask your pension company👍🏻
@@MeaningfulMoney Thanks very much. This is going to need a lot of thought.
Great video, though I still don't get a small point...
I understand if I die pre-75 by beneficiaries can access my pension tax free as drawdown, however post-75 I understand this is taxable.
What I don't get though is whether my kids have to be minors or of pensionable age to drawdown the remains of my pension e.g. post 57 for them, or could they treat it like a FIRE fund and take it at 45 and 50 (these wouldn't be considered dependendant at this age), if I were to die at 85 in respect of my kids (who are only 5 and 10 right now!).
It’s very simple. Irrespective of when you die, inherited drawdown doesn’t have the age restrictions as it does for the original pension holder. As I say in the video, a 5yo child can inherit and start drawing from a drawdown plan.
Is that a shelf full of 'The Meaningful Money Handbook' books behind and above your right shoulder? Just checked my copy and the spine looks the same. 😂
You got me!
Nice vid in explaining a difficult topic. So to just clarify my situation. I’m 58 years old and have a draw down pension of approx £130k. I have no intention of ever withdrawing even after 66 years of age as I have enough income from my property portfolio to let me sustain my life style. So based on your vid are you saying all my pension fund definitely go to my wife or son, when I die? Is that correct ?
Yes, absolutely. You need to complete an expression of wishes in their favour, but yes - that’s exactly what will happen
Great video. For DC pensions Nominees - can they reside outside the UK or must they be UK resident & taxpayers?
So, my father had a DB pension with a well known British bank, he retired, took a lump sum with a monthly payout, unfortunately he died in 98 and the mo they pension passed to my mother who has been in receipt ever since. Would this all end after her passing or is it worth investigating further ?
If it's a DB pension, then it will likely die with your Mum I'm afraid.
Does an inherited pension count towards the recipient's Life Time Allowance?
Nope.
Confused now - I have a Defined Benefit, a Defined Contribution and a personal SIPP - I assume I can just nominate as per individual pension rules?
Essentially yes. With the DB scheme, the nomination will be about what happens to your benefits, not the lump sum. But your two DC schemes will have expression of wishes attached to them. Contact your providers to make sure this is done
Can a nominee or successor be a family member that is above 23 years old? For instance, sibling or niece...
Yes, anyone. But in your nominee is a minor, then there would need to be some kind of trust involved I believe.
Hi Pete, I'm due to receive an inheritance of £15,000 from my late Step Dad's estate, would you recommend lodging it to a personal pension scheme or investing the sum. Many thanks
Can’t answer that, MG. Too many variables and I don’t know enough about your circumstances, plus as a regulated adviser, I can’t be seen to offer specific advice unless on a one-to-one basis. Sorry not to be more help!
i have a small pension with royal london which started when i was 18, im now 41....... only paid into this for 4 years and have only recently found it out , i also have no plans to add more to it as im already in my works DC scheme........ my question is based around the topic of pension beneficiary, if i choose never to draw on this pension and set up my daughter as a beneficiary after i die at say a happy go lucky 90 years of age, is this possible? would there be any hoops to jump through? my thinking is with what very little me and my wife have to other finances wise, i would like my daughter to receieve something every year from me after i die as like a yearly reminder that her dad will always be with her, many thanks
You can definitely do that, for sure. You can complete an expression of wishes in favour of your daughter. It isn’t binding on the trustees of the pension (Royal London) so they may rule in favour of your wife if she’s still living and needs the pension more than your daughter. You also couldn’t dictate the form of the benefits to whoever.
Re: UK State Pension when I die. I have a Thai partner of 25 years - we are not married and have one son aged 19 years. What I would like to know is... Can I nominate her as a beneficiary for my pension when I die - will or can she receive it? - Thank you.
Nope, afraid not. Your state pension will die with you, even if you were married
What happens to a pension of parent who dies and hasn't left a will? Will the next of kin get the pension?
Pensions are not subject to the will at all; they’re (usually) in a kind of trust arrangement, and the pension trustees will decide where it goes. There are lots of variables though, so check the specifics of the scheme in question
@@MeaningfulMoney Thanks. That is so helpful
Hi Pete.... I'm pilipina married Brit cetizen... We're married here in phil legally...bfr we get married we go Brit embassy... And get our docs.. and after a month bruth embassy send us letter impedent.. so we get married..
My question is my husband died last yr Oct 31 2021
I email embassy send all docs to probe it that we're married
But no reply... I need help hw can I get my husband pention as a survival... I'm 59 yrs old
Pls help were to contact about my problem.. god bless
What happens if the pension provider refuses to pay to your nominated beneficiary?
They’d have to have very strong reasons for that. So if you nominated, for example, your 22-year-old babysitter rather than your wife and child, the trustees would exercise their discretion and likely pay out to the wife. The trustees would also likely check in with your executors to see how your will was structured and see if there’s a massive disconnect. Bottom line: keep your expression of wishes up to date, and don’t screw around with the babysitter!
@@MeaningfulMoney Fantastic answer.
It's there any way to contact you.
MeaningfulMoney.tv - contact form there
Can not affored to pay into a private pension got that. Not everyone works alot lost there jobs you need to earm alot off money to au into the penguins I can not affored life insurance I dont work
What you do is withdraw it in paper money and stuff in your coffin so that it’s cremated with you don’t know of a bugger gets any part of it like a good Tory or republican
That's what should happen. As long as it's not in the hands of a Guernsey trustee
I'm pilipina married British... I lost my husband .. last yr almost 4 months end of this month my problem hw can I contk pention office .. our marriage is legal as bfr we get married. We been British embassy her in Philippines.. do I hve rigth to claim it.. pls help I need email of HMRC to call it's hard for me as I do t money left since. He died thank u sir pls need ur help
www.gov.uk/contact-pension-service - Good luck!
When you die its gone as an individual
Not DC pension funds. If you still have a pension fund when you die it can be passed to your beneficiaries.
My ears get blocked and brain turns to cotton wool when people talk about pensions 😳
It sponsors a channel hopping rubber boater !
Hopefully I die when I’m 82 ,my pot will be gone by then ,fingers crossed