Talking about what happens to your pension when you pass away may not be something you are particularly excited about, but it is important to understand the options you leave behind for your loved ones.
With a Drawdown pension, you can usually pass this on to your chosen family member(s), such as a spouse or child/children, without incurring Inheritance Tax. There are flexible options you can choose depending on how you wish your beneficiaries to receive their inheritance, such as a lump-sum payment or by keeping Drawdown.
However, it is important to note that, whilst in most cases your pension is not part of Inheritance Tax, the beneficiary could still face some taxes. If you die before you turn 75, pension income is usually exempt from Income Tax – but if you die aged 75 or over, it is subject to regular Income Tax.
My Will Expert
Your Imperium Advice Personal Account Manager can put you in touch with My Pension Expert’s specialist estate planning service, My Will Expert, if you wish to create a Will*. This can ensure that your pensions are passed on to the person or people you choose, in the manner you choose, and mitigate any Inheritance Tax levied. My Will Expert can also assist you in creating a Lasting Power of Attorney, should you do not yet have one.
*The Financial Conduct Authority does not regulate taxation and trust advice or Will writing.