A random pension question

[Alymac]

I have two pensions, one a final salary scheme which had for 9 years and 13 years with defined contribution.

I have no children and no married partner.

What would happen if I passed away prior to my pensionable age? Would the funds accrued be passed to any estate or are any sums just lost to the state?

My parents and brother are still alive so do still have some family!

Apologies if this was a stupid question but was discussing it at work with a colleague who is about to retire and wondered!

[Stu]

No expert but you should have a named beneficiary. Most schemes will pay around 3.5x annual salary lump sum and if left to spouse/ legal partner, should receive nominal pension. Like most folks, I'm worth more dead than alive, sad state of affairs! 

[MickD]

Best contacting your pension provider.  Some schemes recognise partners, mine is recognised on my Local Government Pension Scheme (LGPS) which is defined benefit/final salary. Think there's been some recent legislation around this - my RAF pension, which is also defined benefit, she currently gets nothing, which I think may be/should be  challenged at some point.  Just my opinion, may be wrong.

[Seasider]

I am a bit rusty on this but it used to be that if you were in an occupational pension scheme (which the final salary scheme would have been) then if you die "in service" there would have been a lump sum payable (typically 4 times salary) to a beneficiary.  The beneficiary would usually be your spouse or civil partner or children but you can nominate a beneficiary which could be wider family or perhaps anyone in the world.  A pension would also have been payable but that is more restricted (basically it would be payable to a spouse or civil partner and/or children).  I don't think that could be nominated to anyone else.  The implication of that of course is that any funds built up in the scheme to cover you which are not needed because you die without a spouse civil partner or children would be kept by the scheme and could be used to provide for other members of the scheme.  

Of course you may not be in service any more - eg you may have retired or left the employment to which the scheme relates.  Then the lump sum typically fell away but the pension bits would still apply.

Defined contribution schemes can be occupational or personal.  Do you know which yours is?  If it is occupational then there should be a members booklet which explains what happens.

[Pete]

Everyone should have a will and for people without a spouse or kids nominate who should inherit your assets.
If none then you can always nominate charities.
You can always modify your will so if changes need to be made later then fill out a new one and destroy the old.

If you leave a will ( free wills can be downloaded for simple affairs ) the nominated benefactors will receive stuff 100 times quicker than if there is no will.

As for pensions, if you have a money purchase or SIPP for example the cash value can be paid out.
For Company schemes there will be rules governing say a spouse's pension usually 50% for life but some might have a higher payout and some perhaps for a limited number of years.
Check with your employer and some possibly might pay out nothing.

Some pension schemes also include life insurance which would be paid to a beneficiary but check the small print as this person(s) might have to be declared.

[CadmiumGreen]

39 minutes ago, Pete said:

If you leave a will ( free wills can be downloaded for simple affairs ) the nominated benefactors will receive stuff 100 times quicker than if there is no will.

And please remember to leave your will with someone or ensure that someone knows where your will is...a will that no one can find does no one any good...and you won’t be around to tell anyone where you may have squirreled it away. This seems common sense, but you’d be surprised.😌