Death benefits

Watch our webinar

Justin Corliss, Senior Business Development Manager at Royal London, talks about:

• Pension death benefit options available
• Impact of pension freedoms on pension death benefits
• Taxation of pension death benefits

 Pension death benefits – facts and planning presentation

Read our top five questions

1. What can the ex-spouse/civil partner do with a pension credit?
   

   If the scheme does not allow the ex-spouse/civil partner to become a member, the transfer value can be paid to a personal pension. If the pension credit is coming from an occupational scheme, a Section 32 will also be an option.
   The value could also be transferred to a scheme the ex-spouse/civil partner is already a member of, if the rules of the receiving scheme allow.

2. Is it possible to take tax free cash from a pension credit?
   If the pension credit originated from crystallised benefits such as an annuity, a DB pension in payment or funds in drawdown, it is not possible for the ex-spouse/civil partner to take any tax free cash.  This is called a disqualifying pension credit.
   
   
3. Is it possible to apply a pension sharing order when you are not married or in a civil partnership?
   No.  Pension sharing is only an option on divorce.  It is not an option for unmarried couples or couples not in a civil partnership.
   
   
4. When giving advice on a pension credit coming from a DB scheme where the only option is a transfer out, are the pension transfer permissions required?
   As the ex-spouse/civil partner is not giving up any benefits in the DB scheme, the pension transfer permissions are not required.
   
   
5. Are there any pensions which can’t pay a pension credit to an ex-spouse/civil partner?
   Yes.  State pensions, pensions inherited on death including beneficiary drawdown or any pensions which already have an earmarking order as a result of a divorce.

Download our technical articles

• Death benefits from April 2015
• Death benefits: discretion or direction
• Death benefits: discretion or direction revisited
• Nominee and successor flexi-access drawdown

Major changes to the tax charges that apply to benefits paid on the death of a pension scheme member took effect from 6 April 2015.  This article explains how the funds were treated.

• Death benefits pre 6 April 2015 overview

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