Private and company pensions

A private pension is one you start up and contribute to yourself. A company pension, sometimes called an occupational pension, is one that you and your employer pay money into.

If you sign up to a private or company pension, you'll probably be asked to state who you want to benefit from your pension when you die. Some private and occupational schemes promise to pay your spouse a pension if you die. Contact your private pension company (or, in the case of an occupational scheme, the trustees) to find out how much this pension would be.

Company schemes often come with death-in-service benefits. Usually these benefits involve the pension scheme promising to pay your nominated beneficiary – often, but not always, your spouse – a multiple of your annual salary if you die while employed by the firm sponsoring the scheme. Let your spouse know about these benefits.

These death-in-service benefits can be quite lucrative and are usually paid in the form of a lump sum. Best of all these benefits are considered outside your estate and HMRC won't touch 'em!

If you have a company pension, it's up to your executors, administrators, or spouse to let the pension scheme trustees know of your demise.

Private and company pensions

If you leave your job or are made redundant, you lose your death-in-service benefits.

The longer you have been paying into these schemes, the bigger the pension pot, and the more money your spouse will get.

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