I have a private pension fund (from a period of self employment) which I do not draw from as a UK pensioner now living in France. I already have sufficient funds for my needs from my UK State and UK Government Service pensions and would like to consider transferring the pension to my adult son as a gift to add to any private employer pension he may be contributing to. What are the implications of doing so and is it even possible?
2 Answers
It's not possible to transfer a pension fund in its entirety to another person, in the UK, other than in the event of your death. What you can do is bequeath the pension fund to your son via an "Expression of Wish" (in which case the value will not form part of your estate for inheritance tax purposes).
Reference for the above: https://www.onlinemoneyadvisor.co.uk/pensions/pension-transfers/transfer-to-another-person/
The other thing you could do is draw down on the pension now (assuming you are within the age limits etc to do so) and immediately transfer any money you receive from it to your son as a gift. He could then add the gifts to his own private pension, or any other regular savings vehicle.
If there's a reasonably significant sum of money involved I would consult an IFA to make sure I wasn't missing any aspects. There are a couple of different IFA search engines I am aware of: https://www.unbiased.co.uk and https://www.vouchedfor.co.uk
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happy with that. I pretty much guessed it would be the case. I think there would be tax implications in France though, if not the UK but that would be a matter for my notaire to advise on.– grahamCommented Jul 20 at 15:14
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BEWARE: It is not normal to deal with a pension via your will; it would normally be handled by an Expression of Wish. I have not had time to properly research but mentioning a pension in your will may well cause it to become part of the estate and liable to inheritance tax. NOTE that even your own link indicates you tell your pension provider it does not say put it in your it in your will. Commented Jul 21 at 9:37
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1Thank you @SteveKidd, I hadn't spotted that difference. Now edited to reflect that point.– VickyCommented Jul 21 at 10:15
You will have to contact the pension provider. They should already have a registered beneficiary who will get the pension fund if you die. (My wife knows a woman where the husbands beneficiary was the 20 years earlier divorced ex-wife because he never changed it; the woman didn’t get a penny when the husband died. So this is worth checking anyway).
You should be able to change your beneficiary without any problems; it is still your pension, this is only in case of your death. Before that at age 55 you can draw out 25% of the amount tax free, and take out more if you pay tax on it and do with that money whatever you like.
Making him beneficiary doesn’t give the relative any other rights or obligations, you can change the beneficiary at any time. And I believe this is totally independent of your will. You give the pension provider instructions what to do in case of your death, and they do exactly that.
