Pension: What happens to my savings when I die? Important rules Britons must consider

Pension: Expert gives advice on preparing for retirement

We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info

Pension saving is undertaken often decades in advance to ensure a comfortable retirement. However, large numbers will also want to consider what happens to their savings when they are no longer here. While certain people will have a spouse they wish to look after, others will be concerned with what their children will receive.

The Pension Protection Fund – designed to help people if their defined benefits pension fund becomes insolvent – has shared guidance with

Many defined benefit schemes provide survivor benefits to a spouse, civil partner or relevant partner when a person passes away.

However, the problem arises due to the fact many people are unaware of these provisions.

The fund stated: “While schemes pay survivor benefits, the amount they’ll pay is dependent on your scheme’s rules.

“To find out if your survivor is eligible to receive a pension when you die, you can find this information in your pension leaving statement.

“Alternatively, you could get in touch with your scheme.

However, there may be some people who are in the Pension Protection Fund, if their employer has become insolvent.

In this case, there will be specific rules for Britons to bear in mind when it comes to their pension.

Premium Bonds: Britons may ‘reassess’ option as inflation soars [INSIGHT]
Pension warning for 2022 as Britons could be hit by ‘large fines’ [UPDATE]
Millions could be in line for state pension age ‘reprieve’ [ANALYSIS]

The scheme explained: “For PPF, what happens is based on whether your partner would have received compensation under the rules of your former pension scheme.

“Furthermore, your children will also receive compensation when you die.

“This is if they are under the age of 18, or under the age of 23 and are in qualifying education or have a qualifying disability.”

Consequently, then, Britons have been urged to take action on their pension arrangements.

The PPF has stressed the importance of discussing one’s pension with family members ahead of time.

Christmas could present the perfect opportunity to do so as many people meet up with family members after a long time.

This, it has been explained, will ensure families are prepared well for any outcome which may arise after a person’s death.

In a similar sense, another expert has urged Britons to get prepared so their family members and friends do not have to worry when their loved one passes away.

What is happening where you live? Find out by adding your postcode or visit InYourArea

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, has recommended Britons update their expression of wishes form for the new year.

She added: “You will have filled out an expression of wish form to say who you would like to receive your death benefits when you started your pension. 

“However, this may have been a long time ago and in the meantime, you may have divorced, separated or started a new relationship and so the person named on the forms may not be the person you want to benefit. 

“While administrators/trustees may have discretion in some cases to award death benefits to someone other than who is named on the form, sometimes they don’t. 

“It’s best to make sure these are updated regularly to make sure your wishes are considered should the worst happen.”

Source: Read Full Article