What happens do a pension when die

[Blondeshavemorefun]

Just that really

Does a pension go to the next of kin /spouse /children automatically

Or does it need to be in a will

Have visions of putting lots into a pension and me dying before getting it

So what happens to it?

Does the person who gets it get it in one lump sum Or taxed on it

And if no will then what happens (obv I have a will) just wondered

Same with state pension

Once they die does their state pension go to someone of its money not received any more

Sorry if silly questions

Yes to will and yes to named guardian for mini blondes

I learnt from when my first dh died. We didn't have a will but also didn't have any kids

So was stressful but my dad sorted most things out but eventually all came to me

So knew when met dh2 needed a will and obv guardianship for our child

State pension dies with you.

Private pension will depend on each scheme. A relative of ours who died had spent 35 years in the same scheme and it would've been a good one, but when they died a month before retirement, the beneficiaries only got 50k from the scheme. I had presumed it would've been higher.

It would help if you would describe the pension scheme that you have.
E.g. was it entirely set up by you, and you decide exactly how much to pay in, nothing to do with your employer?

This is correct

@Blondeshavemorefun so sorry about your first husband.

If you are happy for it all to go to your dh you can leave it. Otherwise you can split it and leave a % to your lo

https://www.moneysavingexpert.com/savings/discount-pensions/

Money Saving Expert website is such a brilliant resource, lots of information in the link, scroll down to number 17 for information on what happens to your pension when you die, important to note, you cannot leave a private pension in your will.

Yes set up by me at 20. Paid a pittance into it for years (30)

Kept meaning to up the monthly payment but life /ivf /mini blondes /surgery so no work got in the way

I wish i had upped it but didn't

Private

No employers as self employed

Thank you

Your Type of pension is usually held in a trust and you nominate beneficiaries by submitting an Expression of Wish form.

Although it is separate from your will and the trustees will normally follow your wishes, they have a duty to ensure that any dependants are considered. Most providers now ask to see the will as well just to ensure there are no obvious omissions or inconsistencies. Some pensions may have been forgotten for decades and have previous partners as beneficiaries.

@ItsReallyOnlyMe is spot on.

I work with defined contribution pensions. Generally we pay out to a spouse or cohabiting partner. Children would be after that on the list.

Often the pensions are payable at the discretion of pension trustees and do not form part of the estate. They are not covered by the Will which can cause confusion.

It can get very tricky if someone doesn't leave a nomination of wishes and has eg children from a first marriage but have been cohabiting for years. The pay out would usually go to a financially dependent cohabiting partner rather than adult children.

I would urge everyone to make sure they have a nomination in place to save family arguments after you're gone.

Can I ask a question of my own (sorry OP!) as you know about pensions?
I am named as a beneficiary of my Dh's pension. He has paid into it for 30 years and his employer pays the same amount each month (ie matches his payments). If he and I were to die together (eg an accident) before retirement age, would the trustees pay to our DD (even if she is not named?
TIA 😊

@Blondeshavemorefun I have always remembered you because I started coming on Mumsnet when your first husband died. It was so incredibly sad. 💐

@Rainydayinlondon ask away. People need to know more info on pensions. Esp me lol

@determinedtomakethiswork oh bless you. Amazed you remember me 💐

When my dad dies my mum will receive part of his pension till she dies then it ends

My FiLs pension passed to his DW, but paid at only 50% of what he was drawing. However, it's for life.

My DD is my beneficiary so if I die before pensionable age 🤞 she gets a big lump sum. If I die in old age (and I don't get married again) she gets a smaller sum.

Mine is an old fashioned final salary pension though. Rare a rocking horse 💩 these days.

@Blondeshavemorefun

I see you have a private pension so any reference to Defined Benefit / Defined Contribution will not apply to you. There will be no Trustees as you do not belong to an occupational scheme.

The death benefit on your pension will be calculated as per the information provided in your policy documents (contact the insurance company if you don't have these).

If you die before this pension is taken at 'retirement' then the proceeds will form part of your estate and will be distributed in accordance with your will. So if you have stated your children receive an equal share of everything, this money will be included in this.

If you survive to 'retirement' age you could take an annuity (a series of regular payments set at outset). On your death these will no longer be paid unless you die within a 'guarantee period' selected at the time you take out the annuity. If you have selected an annuity which pays out to a spouse on your death then this would be paid to them until they die.

Instead of selecting an annuity at your 'retirement' you could select a drawdown type of arrangement, where the money is invested and you can take income from it and the money reduces as income is taken. If you die with this arrangement then generally your beneficiaries can take the remaining lump sum as part of your estate or select an annuity for themselves.

@Rainydayinlondon I think in this case it would be subject to Trustee discretion, but it would take very hard hearted Trustees not to pay out the monies to any surviving DC.

@It’sReallyOnlyMe

thank you!

I love pb. Don't have many

Was wondering if better to buy pb rather then put extra into pension

Guess I'm worried that the extra I manage to put on when work more hours - I won't get back - or they dh /mini blondes won't get the full amount

Does that make sense

@Blondeshavemorefun a bit in both?

I love pb as you can get your original money back if you need it! Plus the winnings on higher investments outstrip interest gained elsewhere at very low risk. (We are so exceedingly risk averse it’s painful for ifas).

I would love £50k max in pb

Never gonna happen tho but can dream

And obv winnings are tax free

And you can get money out whenever

Assume you can't ever take out of a pension before reach pension age

Not necessarily None of us can advise, it depends on the specific private pension .
OP - do you receive an annual pension statement? That info may be in there, it was in mine. If not, you could contact your pension provider

@OMGitsnotgood yes I do. And thus I know what I've paid in over the last 30yrs is 3 times the amount of total

Not sure if this is good or bad

Just wish I had increased if years ago

Does it not say in your statement what happens to your pension when you die? There were several different pension schemes in my company, the post death pension provision varied but I know there waa a section on it in the annual statement. But maybe it was a more comprehensive statement than the one you receive.

It depends on the pension, and whether you die before or after retirement. For some private pensions when you retire they are converted into an "annuity" which is effectively a morbid bet with a finance company - you give them £XXX,XXX lump sum and they agree to give you £YY,YYY per year until you die. You then live for Z years. If Zx£YY,YYY is less than £XXX,XXX then the finance company won the bet and made a profit. If it's more then you won, and the finance company makes a loss. The ratios between the above figures are calculated so that on average over all their customers they make a net profit. In these pensions there's usually nothing after you die though you can buy a joint annuity covering boty members of a couple.

With other pension types you don't buy an annuity but you take the risk for yourself that you might outlive the money, and you spend from the pot itself.

A lot of company pensions will indeed only pay a reduced survivors pension to your spouse, but a private pension for a self-employed person is more likely to be able to be inherited in its entirety. If I die before I retire my pot can become my DC's pension pot giving them a head-start in their own saving.

All private pensions are DC pots, unfortunately the vocabulary is mixed up on here.

ALL Defined Benefit pensions are occupational, not private.

My bad for being too technical on this (that’s not sarcasm).