SIPP pension if terminally ill or dead.
Discussion
One of my immediate family is 56 and has £150k in a SIPP pension. She has metastatic breast cancer and perhaps has 2-3 years to live if she is lucky.
It would be a shame if she couldn't use her pension before she dies. Is there any provision for this? She hasn't taken her 25% cash lump AFAIK.
TIA for any guidance, even if it's just "find an IFA".
Sorry to hear about that.
IANAFA.
There are normally documents available from the pension provider which explain the process in simple terms.
As far as I know you normally require a doctors report and this is sent to the trustees who decide what to do.
I think you normally need to have an outlook of less than 12 months and in these cases you normally are paid the entire value of the pension in cash.
If you are younger then its tax free, if you are over 75 then its taxed IIRC.
There are other issues to bear in mind though, such as any life cover that might exist or how the estate is taxed after death in that the money still inside a pension is treated differently.
The above is only information I have obtained when speaking to a close relative who is in a similar situation and she was trying to decided what to do.
Also its worth bearing in mind sometimes these things dont go how you expect. My relative had a diagnosis which gave her 6 months. 3 years later and lots of chemo and operations she is still fighting it.
IANAFA.
There are normally documents available from the pension provider which explain the process in simple terms.
As far as I know you normally require a doctors report and this is sent to the trustees who decide what to do.
I think you normally need to have an outlook of less than 12 months and in these cases you normally are paid the entire value of the pension in cash.
If you are younger then its tax free, if you are over 75 then its taxed IIRC.
There are other issues to bear in mind though, such as any life cover that might exist or how the estate is taxed after death in that the money still inside a pension is treated differently.
The above is only information I have obtained when speaking to a close relative who is in a similar situation and she was trying to decided what to do.
Also its worth bearing in mind sometimes these things dont go how you expect. My relative had a diagnosis which gave her 6 months. 3 years later and lots of chemo and operations she is still fighting it.
red_slr said:
Also its worth bearing in mind sometimes these things dont go how you expect. My relative had a diagnosis which gave her 6 months. 3 years later and lots of chemo and operations she is still fighting it.
True. We have someone in the extended family who had a cancer diagnosis who was given 3 months to live. That was 7+ years ago - the cancer was then found to be slow spreading and manageable with medication. They're now facing liver (or kidney) failure due to the medication. They've survived well beyond the revised estimate of two years.red_slr said:
Sorry to hear about that.
IANAFA.
There are normally documents available from the pension provider which explain the process in simple terms.
As far as I know you normally require a doctors report and this is sent to the trustees who decide what to do.
I think you normally need to have an outlook of less than 12 months and in these cases you normally are paid the entire value of the pension in cash.
If you are younger then its tax free, if you are over 75 then its taxed IIRC.
There are other issues to bear in mind though, such as any life cover that might exist or how the estate is taxed after death in that the money still inside a pension is treated differently.
The above is only information I have obtained when speaking to a close relative who is in a similar situation and she was trying to decided what to do.
Also its worth bearing in mind sometimes these things dont go how you expect. My relative had a diagnosis which gave her 6 months. 3 years later and lots of chemo and operations she is still fighting it.
Presumably were she paid the lot in cash she would pay tax at her marginal rate of income tax?IANAFA.
There are normally documents available from the pension provider which explain the process in simple terms.
As far as I know you normally require a doctors report and this is sent to the trustees who decide what to do.
I think you normally need to have an outlook of less than 12 months and in these cases you normally are paid the entire value of the pension in cash.
If you are younger then its tax free, if you are over 75 then its taxed IIRC.
There are other issues to bear in mind though, such as any life cover that might exist or how the estate is taxed after death in that the money still inside a pension is treated differently.
The above is only information I have obtained when speaking to a close relative who is in a similar situation and she was trying to decided what to do.
Also its worth bearing in mind sometimes these things dont go how you expect. My relative had a diagnosis which gave her 6 months. 3 years later and lots of chemo and operations she is still fighting it.
grahamm said:
I think she can take 25% tax free and draw down the balance as taxable income as she is over 55
I am happy to be corrected but if you are under 75 you can access the entire pension tax free if your outlook is less than 12 months (certified by a doctor).If you are over 75 then tax is payable on 75% of it.
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