01792 477 763 Chartered Financial Advisers

Death Benefit Changes and the Introduction of Nominee and Successor Flexi-Access Drawdown

  • Thursday, May 11, 2017

Since the introduction of retirement freedoms from 6th April 2015 the changes above have provided for further planning opportunities.

Prior to 6th April 2015 only a dependant of the member could receive a drawdown income on the member’s death.  Now a nominee or nominees can benefit in the same way under what is known as nominee flexi-access drawdown.

Subsequently on their death, a successor or successors can take a drawdown pension, under successor flexi-access drawdown.

Nominee and Successor Definition

A nominee is an individual nominated by the member or the scheme administrator who is not a dependant.  The scheme administrator can only nominate an individual where there is no surviving dependant, individual or charity nominated by the member.

A successor is an individual nominated by a dependant, nominee or successor of the member, or the scheme administrator.  The scheme administrator can only nominate an individual where there is no surviving individual or charity nominated by the beneficiary.

The main advantages of nominee and successor flexi-access drawdown are:-

  • Passing down wealth through the generations under a pension wrapper.
  • Retaining monies under a tax advantaged environment until such time they are needed by the nominee or successor.  If they are not needed they can then be passed to the next generation on the nominee or successor’s death.
  • Providing a flexible income to the nominee or successor as and when they need it.  If their predecessor dies before age 75, income is available tax free.
  • Excellent IHT planning.

It is therefore of the utmost importance that nominations are addressed correctly at the earliest opportunity.

 

 


Comments are closed.


Image

Article by

Independent Financial Adviser

Phil is an independent financial adviser and leads the pension’s team.