revtothelimit - motorbike forum

I refer you all to the late, great Viv Stanshall.

'If I had all the money I'd spent on drink, I'd spend it on drink.'

About the 25% tax free..

If you don't particularly need this for any reason, is the best option currently to leave it where it is or reinvest into something else which may earn interest or be a safe place. I have also heard about recycling.

Even just taking it and putting it in an ISA would be tax advantageous. You've got an ISA limit of £20k per year though, so it might take you a while to get it all into one!

This is the chance you've got to take some of your pension tax free though, so don't miss it.

Edit: you can even take it out, put it in an ISA and reinvest it in exactly the same place(s) it was before. Only this time you're not liable for tax on the 'earnings'.

Without wishing to sound rude, this is perhaps the time to get some professional advice.

Regarding the situation where there are 2 pensions in a household, unfortunately you also need to consider what happens if one of the contributors falls under the celestial bus. Many of the 'fixed' costs stay the same. Bad enough losing a partner but finding out you need to move house etc as well...

Working out a figure that just about provides a 'comfy' existence might need a bit of added headroom in some situations.

(Some pensions pay 50% to the surviving partner but you may need to sort that on arranging eg an annuity or to tell your pension people and make the necessary election I think they call it).

Count Steer wrote: Tue Apr 11, 2023 8:01 am Regarding the situation where there are 2 pensions in a household, unfortunately you also need to consider what happens if one of the contributors falls under the celestial bus. Many of the 'fixed' costs stay the same. Bad enough losing a partner but finding out you need to move house etc as well...

Working out a figure that just about provides a 'comfy' existence might need a bit of added headroom in some situations.

(Some pensions pay 50% to the surviving partner but you may need to sort that on arranging eg an annuity or to tell your pension people and make the necessary election I think they call it).

I assumed if i croaked it my missus just got my pension as a lump sum to do with whatever she wanted.

weeksy wrote: Tue Apr 11, 2023 8:04 am I assumed if i croaked it my missus just got my pension as a lump sum to do with whatever she wanted.

Not necessarily if you've already bought an annuity though.

You're not drawing yours yet, so yeah likely as not it'll all go to her. A) because she's your next of kin and B) because you've probably already nominated her in your pension docs, even if you've forgotten?

Mr. Dazzle wrote: Tue Apr 11, 2023 8:07 am

weeksy wrote: Tue Apr 11, 2023 8:04 am I assumed if i croaked it my missus just got my pension as a lump sum to do with whatever she wanted.

Not necessarily if you've already bought an annuity though.

You're not drawing yours yet, so yeah likely as not it'll all go to her. A) because she's your next of kin and B) because you've probably already nominated her in your pension docs, even if you've forgotten?

OK, makes more sense....so that's more something to think about for the future and when we get to there, not necessarily right now.

Well....if one thing should be clear from this thread, it's never too early to think about these things

Mr. Dazzle wrote: Tue Apr 11, 2023 8:09 am Well....if one thing should be clear from this thread, it's never too early to think about these things

No, granted, but as it's already in place, there's nothing as such that needs doing right now.

weeksy wrote: Tue Apr 11, 2023 8:04 am

Count Steer wrote: Tue Apr 11, 2023 8:01 am
(Some pensions pay 50% to the surviving partner but you may need to sort that on arranging eg an annuity or to tell your pension people and make the necessary election I think they call it).

I assumed if i croaked it my missus just got my pension as a lump sum to do with whatever she wanted.

After my wife died I got a letter from the tax people who told me about some sort of pension money due to me courtesy of Travis Perkins. I knew nothing about it so got in touch with TP and was told my wife had been paying into a pension scheme when she worked for Wickes and that I was now the beneficiary.

I suggested that they give me the pot of money and I'd give it to my grandchildren but the guy explained that it wasn't a pot of cash, but a pension and it'll be paid to me monthly until I die. It wasn't much and it still isn't much, about £50 a month but it pays for my groceries. I have no idea what percentage (of what my wife would have got) I'm getting but hey, it doesn't really matter.

weeksy wrote: Tue Apr 11, 2023 8:04 am

Count Steer wrote: Tue Apr 11, 2023 8:01 am Regarding the situation where there are 2 pensions in a household, unfortunately you also need to consider what happens if one of the contributors falls under the celestial bus. Many of the 'fixed' costs stay the same. Bad enough losing a partner but finding out you need to move house etc as well...

Working out a figure that just about provides a 'comfy' existence might need a bit of added headroom in some situations.

(Some pensions pay 50% to the surviving partner but you may need to sort that on arranging eg an annuity or to tell your pension people and make the necessary election I think they call it).

I assumed if i croaked it my missus just got my pension as a lump sum to do with whatever she wanted.

Probably, but it depends on the sort of pension. As Dazzle says, annuities are one thing (depends on what you buy), final salary type pensions another and SIPP type another.

Mr. Dazzle wrote: Tue Apr 11, 2023 8:07 am

weeksy wrote: Tue Apr 11, 2023 8:04 am I assumed if i croaked it my missus just got my pension as a lump sum to do with whatever she wanted.

Not necessarily

You might need to complete two forms nominating her:
- employer, any death in service payment
- pension provider

Horse wrote: Tue Apr 11, 2023 8:50 am

Mr. Dazzle wrote: Tue Apr 11, 2023 8:07 am

weeksy wrote: Tue Apr 11, 2023 8:04 am I assumed if i croaked it my missus just got my pension as a lump sum to do with whatever she wanted.

Not necessarily

You might need to complete two forms nominating her:
- employer, any death in service payment
- pension provider

So if someone didn't do that...where would it go instead ? (i have done the work one by the way.)

I also doubt you/she would get a lump sum to do whatever she wanted with?

I haven't actually checked, but I can't imagine HMRC would give up all that sweet sweet tax income you've had relief on?

Death in service is usually tax free, but there are mixed comments on it from different financial companies.

Mr. Dazzle wrote: Tue Apr 11, 2023 7:38 am
Without wishing to sound rude, this is perhaps the time to get some professional advice.

I suspect that time was some time ago.

viewtopic.php?p=109552#p109552

weeksy wrote: Tue Apr 11, 2023 8:52 am

Horse wrote: Tue Apr 11, 2023 8:50 am

Mr. Dazzle wrote: Tue Apr 11, 2023 8:07 am

Not necessarily

You might need to complete two forms nominating her:
- employer, any death in service payment
- pension provider

So if someone didn't do that...where would it go instead ? (i have done the work one by the way.)

Guessing, probably to her as spouse anyway - but worth doing the form in case there is any advantage such as speeding the process.

On my work pension, if you failed to nominate a beneficiary, the pension fund would become part of your estate, should you die in harness.

That would make it liable for inheritance tax, as well as other complications.

This was in Scotland.

JackyJoll wrote: Tue Apr 11, 2023 9:37 am On my work pension, if you failed to nominate a beneficiary, the pension fund would become part of your estate,

That would make it liable for inheritance tax, as well as other complications.

... Such as if you die intestate it might take years to sort out.

I think with final salary schemes, when you die some of your pension dies with you and next of kin gets part of it. I could be wrong on that mind. With a drawdown pension, it all goes to nok..

My pension is managed for me in a diversified portfolio, so eggs not in one basket. I have a meeting on the 24th to discuss risk and whatever. It's good to get the view's of other's so I've a bit of ammo to use.

Pension providers generally tell you to leave the tax free portion in the scheme but then, they probably would.