small pension-short life expectancy-options?

[z109]

A relative has Alzheimer's disease. They will retire later this year. They have a small personal pension policy (about 15,000 GBP built up in it).

As their life expectancy is short, what options are there for getting the money out of the policy to make their last years (probably 2-3) more comfortable.

Thanks for any advice.
YM.

 

[F. Kruger]

I am not sure about the about the Rules in the UK regarding 'Trivial Pensions' (even if there are any) but in Ireland, if a fund is under €20K, the pension holder can take the 25% and then take the balance as a once off pension, subject to tax and PRSI. This is provided that the total of all funds available for pension benefits is less than €15K (may have been amended upwards recently(?)).

They should probably contact the pension provider and ask what the options are and if there are concessions regarding the size of the fund.

 

[z109]

Thank you for that. Will do.

 

[Homer]

Hi YM

When contacting the UK provider, be sure to tell them about your relative's state of health.

Under Irish Revenue rules, full commutation is allowed (subject to 10% tax on the excess over normal commutation) in cases of extreme ill health. I think a similar provision may apply in the UK, although the case you outline may not satisfy the criteria for full commutation.

Regards
Homer