What happens on death?

Lump sum death Benefits for those who die before age 75 without having drawn any pension benefits are normally tax-free.

Lump sum death benefits under Income Drawdown are taxed at 55%.  If there are no dependants the fund may be paid out tax-free to a registered charity nominated by the investor.

As an alternative to drawing a lump sum the fund can be used to provide a dependant's pension.  The 55% tax charge will not apply, but the dependant's pension will be subject to income tax.

A further option is for the dependant to continue with the Income Drawdown arrangement. 

To see whether Income Drawdown is right for you please contact us.