Death Benefits pre Retirement

Lump Sum

An amount up to the Standard or Personal Lifetime Allowance may be paid without incurring an immediate tax charge.  A higher figure may be paid if the member has primary or enhanced protection.  Death benefit lump sum paid above this level will incur a tax charge of 55%.

Dependants Pension

The balance left over after a death benefit lump sum has been paid may be used to provide a dependants pension.  There is no limit to the amount of pension.

The pension may be paid as one or a combination of a secured pension (annuity) or unsecured pension (income drawdown).

Death Benefits post Retirement

The options are as follows:

Under 75 Secured Pension

• An annuity would be payable for the remainder of the dependants life, or
• Pension protection – Lump sum death benefit payment based on the difference between the annuity purchase price when the secured pension was selected and the income payments made to date of death taxed at 35%, or
• If an annuity had been purchased with a guarantee then payments would continue till the end of the guarantee.

Under 75 Unsecured Pension

• Continue with Income Drawdown, or
• Short term annuities, or
• The remaining fund can be paid as a lump sum which would be subject to 35% tax charge

Over 75 Alternatively Secured Pension with dependants (Income Drawdown)

• Dependants secured pension, or
• Unsecured pension if dependant under age 75, or
• Alternatively secured pension if dependant over age 75.

Over 75 Alternatively Secured Pension with no dependants

• A transfer payment to other non-dependant members of the pension scheme, or
• A payment to a registered charity