Superannuation Pension - Spouses Provision

[sretiolc]

If I opt to not use the spouses pension provision would it increase the value of my monthly payments ???

[boxtops]

It would depend on the T&C of your pension plan - it didn't cost me any more in subscription, when I did it. Your pension paperwork should explain this.

[sretiolc]

Thankyou

[DocHH]

Your question is a little unclear.

I will assume you are referring to buying an annuity with your Pension Fund, which has been accumulated in a defined contribution Company scheme, or Private Pension. The annuity rate for a single life pension is higher than the annuity rate for the option that leaves your spouse a pension on your demise. The rate will also depend on the age difference between you and your spouse, and also depend on if you opt for a pension that increases annually. The weekend Telegraph gives tables of annuity rates for numerous options. If however you are referring to how much you contribute to a defined contribution pension, then it will have no effect on your contributions.

If you are referring to a final salary scheme, then the rules are dependent on the scheme.

[sretiolc]

Ooh that sounds complicated.
I've been paying into a local authority scheme for 30 yrs and am due to receive it soon. I was told by a money advisor some time ago that I would probably have the option to not use the spouses pension (payable on my death) which is on my statement as my partner does not need it. She thought that this might also benefit my monthly pension amount. As it was such a long time ago I can't remember the details when I took it out. I just thought I'd ask in case anyone had done this themselves.

[DocHH]

I am afraid that all the things related to Pensions are complicated.

Personally when buying annuities I have always opted for "level income" without "spouse pension", but with either 5 or 10 year guarantee. I constructed an EXCEL spreadsheet to help with my decision.

When you reach pensionable age I suspect you will be given various options. They will probably include questions like, "do you want your pension to increase each year, and by how much" giving an option of RPI,5%,3% etc., "do you want a spouse pension and how much of your pension should that be" etc. The Pension provider will then give you details of annual pension income, dependant on the examples you request. The booklets you will receive are very informative. But to be honest I found that increasing "pension income" and "spouse pensions" options resulted in substantially lower initial personal pension income, which took ages to catch up to a "level income" option. AND if your spouse does not need the income why take a lower income now to provide a small income in the future for someone who does not need it!

[boxtops]

I understood your question, streiolc. My NHS pension had much the same provision - an amount for my husband after my death is built in. I didn't have any choice in the matter though, it just came with the package.

You should be getting an annual statement from your provider, if you don't you can ask them for it. They should certainly be sending you a forecast of the amounts you are likely to receive soon, with accompanying literature which should make it all clear.

[Hymie]

Where a final salary scheme has the benefit of a spousal pension in the event of your death (normally at a 50% pay out rate); should the pensioner have no spouse (or civil partner), then there is normally no enhanced pension in lieu of this non-existent benefit – despite this being of benefit to the scheme in general.

[sretiolc]

Thank you all for taking the time to answer. It is all very scary when met with all these options

[sretiolc]

I am taking voluntary redundancy so will be living on my superannuation pension only until I'm old enough for state pension. I presume that my Payroll dept will let inland revenue know ? Is there anyone else I need to notify?