What happens to your Retirement Account if you die?
| Flexible Pension pot | Flexible Drawdown Pot | |
|---|---|---|
| If you’re under 75 when you die | Money in your Flexible Pension Pot can be paid out as a lump sum to a beneficiary. This lump sum will be tax-free up to the Lifetime Allowance limit*. | Any funds in your Flexible Drawdown Pot can be paid as a tax-free lump sum. |
| Alternatively, any beneficiary can take tax-free withdrawals from a drawdown policy, although the beneficiary would need to transfer to another provider to do this as we don’t offer this option.A beneficiary will also have the option of using the money in either or both pots to buy a guaranteed income from another provider. These income payments would be tax-free. | ||
| If you’re 75 or older when you die | Money in the Flexible Pension Pot can be paid as a lump sum to a beneficiary. This lump sum would be subject to a 45% tax charge. This will change from 6 April 2016, when lump sums will be taxed as income earned by the beneficiary. | Money in the Flexible Drawdown Pot can be paid as a lump sum to a beneficiary. This lump sum would be subject to a 45% tax charge. This will change from 6 April 2016, when lump sums will be taxed as income earned by the beneficiary. |
| Any beneficiary will also be able to take withdrawals, or receive a regular income. However, the beneficiary would need to transfer to another provider to do this as we don’t offer these options. These payments will be taxed as income. | ||
*This is usually set at £1.25 million but can vary depending on an individual’s personal circumstances.
