With Money Purchase / Defined Contribution pensions (those that the majority of people have now where the value of the pension is based on the value of the fund(s) in which it is invested) there are more choices. It is worth finding out what you can do so you can make the choice that best suits your wishes. The first thing to do in all cases is to work out who you want the money to go to and write a letter to the pension provider to this effect, and keep a copy of the letter in your files.
You can always change this at any time by writing a new letter to cancel the old one and lay out new beneficiaries.
Monday 24 February 2020
Monday 17 February 2020
FINAL SALARY PENSIONS
Final Salary/Defined Benefit pensions (those based on the number of years worked and the salary)
usually only allow for a pension after your death to be paid to a dependant. If your wishes are different to that you should make contact with the pension provider and discuss the matter.
usually only allow for a pension after your death to be paid to a dependant. If your wishes are different to that you should make contact with the pension provider and discuss the matter.
Monday 10 February 2020
WHAT HAPPENS TO YOUR PENSION WHEN YOU DIE?
There are a few points about dealing with pensions in the event of a death that we want to explain in case they may apply to you or someone you know. We have had a few cases recently where an understanding of pension options on death was vital to achieving the best results. It is worth avoiding future problems by taking a bit of time now to make sure you have the best possible arrangements.
The first point about pensions and death benefits is to ensure that the value of your pensions pass to the people that you want to have them, and also that they are done in the most tax-efficient way. Nominating beneficiaries for pensions can usually be done by simply writing to your pension providers and putting in writing what your wishes are in this regard. If you do not do that, you run the risk of the money ending up where you did not want it to go, perhaps even, the Government! It is important to understand, however, that if you nominate beneficiaries, it does not guarantee that the pension scheme administrators will pay the pension to them. The pension trustees/administrators have a responsibility to look into the deceased’s situation and have a right to use their discretion. However, they normally would act according to the deceased’s written wishes unless there is a good reason not to.
The first point about pensions and death benefits is to ensure that the value of your pensions pass to the people that you want to have them, and also that they are done in the most tax-efficient way. Nominating beneficiaries for pensions can usually be done by simply writing to your pension providers and putting in writing what your wishes are in this regard. If you do not do that, you run the risk of the money ending up where you did not want it to go, perhaps even, the Government! It is important to understand, however, that if you nominate beneficiaries, it does not guarantee that the pension scheme administrators will pay the pension to them. The pension trustees/administrators have a responsibility to look into the deceased’s situation and have a right to use their discretion. However, they normally would act according to the deceased’s written wishes unless there is a good reason not to.
Monday 3 February 2020
39 years!
Sovereign Finance enters its 39th year of trading in 2020. With the new Government it looks like it will be a year of changes although BREXIT is likely to still remain the focus of political attention for some time to come. As regards personal finances, our view continues to be Stay Calm and Carry On. We will need to wait and see what changes will be made in tax and personal allowances but they are unlikely to be altered before the new tax year.
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