Serious ill health pension

[Shepster34]

Hi

while i feel im losing all control waiting for a diagnosis of this horrible disease, i decided to take some control back and look at my finances.

Im 50 and have worked at the same company for 34 years. I have a db final salary pension for 30 years and a contribution pension for 4 years.

i understand that if you are given a terminal diagnosis of 12 months or less you can access your pension as a lump sum tax free. We are a big company so i would yhing we abide by normal rules.

Has anyone been able to do this and was it an easy process?

Ive read the cash lump sum is usually 20 years of the yearly pension and i can also cash in my contribution based pension as its with the same company.

the reason i want to do this is because if i was to pass away my wife would only get 50% of my monthly pension and the pension ends when my wife passes.

This way she would get 100% of my pension each month and we may be able to go on a few trips or at least be comfortable in my last remaining months. Also as my wife isnt in the best of health, she can leave any to our children where as otherwise its just left in the company pension.

[matthew55]

Get a DS1500 and the pension company sends out a declaration for a doctor to sign. I did it and got the whole pot of one tax free. Another just paid a set sum. Good luck x

[Bowler]

My view is that you should take one step at a time. By that I mean if or until you get diagnosed you can’t possibly make informed decisions about short or long term financial matters.

[Shepster34]

Thanks.

as im only 50 leaving my fairly young family is one thing that is keeping me up at night. Being a burden on them is the other.

I totally get what you mean but ive lost control of this. I'm pretty sure i have it, my wastage and weakness is quite bad especially in my right arm which seems to be getting worse quickly.

im totally right handed so wont be able to write or anything once my arm goes. I sure would preferred it to have been a leg.

I feel better knowing i can leave my family with a good amount of money that will help my wife with financial security. And if anything happens to her then at least my children are also looked after afterwards

[Shepster34]

Get a DS1500 and the pension company sends out a declaration for a doctor to sign. I did it and got the whole pot of one tax free. Another just paid a set sum. Good luck x

Thank you.

What happens if the doctor thinks you may have longer than 12 months to live? Can you only get to your pension at that stage of 12 months or less? Or does mnd being terminsl automatically mean you get the serious ill health pension.

[matthew55]

Once diagnosed you are time limited so no one argues about just how long you have. Harsh reality I'm afraid. 😁x

[Bowler]

Ok I get forward planning. Have you thought about a lifetime power of attorney. You can set that up now so that it only comes into effect if you become incapacitated. That would take away the need to rush into decisions now

[Suefromwakey]

Yes Shepster Bowler speaks sense, there are income tax implications as you mention.........do you have a financial adviser at work? pensions are a nightmare but sometimes they are worth more to your loved ones after death........if I die before I am 74 my husband gets it all - no tax - after 74 I think theres a 40% tax implication - my chap told me to leave it at the moment as its making more than it could ever do at the bank

Sue

[Shepster34]

Yes Shepster Bowler speaks sense, there are income tax implications as you mention.........do you have a financial adviser at work? pensions are a nightmare but sometimes they are worth more to your loved ones after death........if I die before I am 74 my husband gets it all - no tax - after 74 I think theres a 40% tax implication - my chap told me to leave it at the moment as its making more than it could ever do at the bank

Sue

As im final salary that is now closed the pot is final and only changes with some index interest rate each year.

Im only 50 so mine will be all tax free i believe. Where does income tax come into it. Do i have to pay income tax when i get it? I thought thats what tax free meant?

My wife wont have to pay inheritance tax when its a spouse. So it will just be in a savings account for her.

[Bowler]

Shepster34 you need to understand none of us here are pensions or financial experts. I would respectfully suggest you contact your pension administrator to fully understand your options. Sorry if that sounds blunt but you appear to be going round in circles.

[Shepster34]

Ok thanks just wondered if anyone had done it.

[GaryM]

Some members only come on every few days. You might get more responses in a while.

[matthew55]

If you satisfy the requirements of terminal illness there is no tax payable. Simples init? 😁x

[Shaun]

Hi
it’s a difficult one , and it all depends on your consultant and his willingness, most I hope are on our side.
fortunately, when it comes to insurances it’s based on your consultants opinion, just because he states 12 months or less it’s not his fault if you live longer, so there is no comeback on them, which is good. And I think they are more willing to sign of on claims

it’s good to plan, but wait until you have a confirm diagnosis/ prognosis
prognosis is very difficult with MND, as some of us drag it out and some go too quickly (RIP Jeanette )

the DS1500 mentioned is only given for prognosis of 6months , however I know these are dished out for slightly longer expectancy.
but a lot of insurances are 12 months , so they will pay out with DS1500 , if you don’t get a ds1500 you will need doctors report for 12 months, .. crazy system I know.

as bowler suggests get proper advice starting with your employer. and watch out for scams there are people out there that will be too keen to get hold of your pension. Keep the chain short and deal directly where you can

from personal experience, I also have a final pension salary waiting in the wings and several personal ones, I’m letting my fp pension sit there and accrue, as on slow progression, but did cash in one personal pension , payed tax on it, but decided I would rather have 10k and enjoy whilst I can

and as Matthew says it’s tax free but you need the consultant to back up your claim, otherwise it will be tax deductible

Get proper advice and a sympathetic consultant
s.

[matthew55]

If you don't ask you don't get. 😉😁x