Unsecured Pension -
death benefits
For many people main
attraction of an income drawdown contract are the death
benefits, as they view an annuity as poor value in the event
of death.
It is true that the death
benefits are more flexible, and that there is a possibility of a
return of the fund, which is much more limited with an annuity,
even though it is possible to build in a
guarantee period, or opt for
value protection.
The death benefits under an
unsecured pension contract using income drawdown are as
follows:-
- Continue drawing down an
income from the fund, until either you or your spouse would
have been 75
- Buy an annuity with the
remaining fund value
- Have the value of the fund
paid out, less tax at a rate of 35%
If there any
protected rights (funds accrued from contracting out of
the Second State Pension formerly SERPS), then these first
have to be used to provide your spouse an income either by
continuing with drawdown or annuity purchase. Only if you
have no surviving spouse, or when you spouse subsequently
dies can the fund that accounts for protected rights be paid out.
If death benefits are your
main concern then it would also be worth considering
phased income drawdown.
The death benefits under
alternatively secured pension are not as flexible as under
unsecured pension. See
alternatively secured pension - death benefits for more
detail.
If
you have a question about income drawdown or an unsecured
pension contract in more detail then phone us on 0800 011 2713
or contact us online.
Don't take any
chances with your pension, your retirement will depend upon
it,
talk to an
independent pension specialist now

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The guidance and/ or advice contained in this
website is subject to UK regulatory regime and is
therefore restricted to consumers based in the UK
Pensions and Annuities Ltd is authorised and
regulated by the Financial Services Authority under
reference 494480.
Registered Office: 6 New Rd, Purton, Swindon, SN5
4HF. Company Registration Number: 06725914 |
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