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Can I transfer my pension to another person or my wife?

Can I transfer my pension to another person or my wife is a question many of us ask at some point. Once you’ve read this Moneyfarm blog, not only will you know the answer to these questions, but you will also know how to go about doing it. Please, read on.

Can I transfer my pension to another person in the UK?No, your pension can be transferred or gifted to another individual
When can I transfer my pension to my wife?When you are deceased or divorced
What types of pensions can I transfer to my spouse in the UK?Workplace pensions, and personal and private pensions.
Does my spouse inherit my state pension when I die?Yes, your spouse can inherit part or all of your state pension.
Can I transfer my pension to my ex-wife in the UK?Yes, it is possible via a court order or financial agreement

Can I transfer my pension to another person?

A pension is designed to be a personal and individual thing. Pensions are designed specifically for you, in your name, and are subject to certain tax benefits that only apply to you. So, the answer to the question “Can I transfer my pension to another person?” is no, usually, you cannot unless it’s in the case of your demise.

Can I transfer my pension to my wife or civil partner

As far as the other question goes – “can I transfer my pension to my wife or civil partner?” the answer remains the same. Your pension can only be transferred to your wife or civil partner if you are deceased. However, there is a caveat, and that caveat is in the case of a divorce.

In the case of divorce, you can file for a pension sharing order (PSO).

Let’s now address what can be done with your state pension after death.

What about my state pension?

If you ask yourself, “Can I transfer my state pension to my wife?” the answer is not while you are alive.

If you want to know about the new state pension and your wife’s right to pension inheritance, please click here. For information about the basic state pension and your wife’s right to pension inheritance, please click here.

Now let’s move on to private pensions, and if you’re wondering if you can transfer your private pension to your wife or another person, we will walk you through the guidance.

Transferring private pension funds to your wife, husband or other people

Private or personal pension funds work differently when it comes to transferring them to a spouse or other people because, unlike the state pension, private pensions are amassed pension pots. However, the basic rules are the same – i.e., you can only transfer a private pension, or rather, a pension pot, upon your death or if you and your partner or spouse get divorced.

Depending on the rules laid down by your pension provider, you can transfer your pension pot to anyone you nominated before your death, so, for example, in this way, if your husband dies you can get his private pension. The pension beneficiaries can include children, spouses, relations and ex-spouses (unless you remarry). How much money from the pension or pensions you give each beneficiary is entirely up to you.

What are the tax implications of transferring your pension pot?

Usually, a pension pot is not considered part of your taxable estate, so it’s exempt from inheritance tax (IHT). It’s why letting pension savings sit within a pension scheme can be considered a tax-efficient way of passing pension funds to beneficiaries.

As well as avoiding IHT, pension pot funds may have tax benefits on any returns made in the future. For example, if you die before age 75, your named beneficiaries might be able to make tax-free withdrawals.

However, one thing you need to be careful of is taking money from your pension pot and leaving it in, say, your bank account. If you do, it might form part of your estate and could become taxable.

Money remaining in private pension schemes can be transferred to dependents or family members in a tax-efficient way depending on the following:

  • What type of pension scheme you are enrolled in
  • Nominating beneficiaries – this must be done via your pension provider
  • How old you are when you die because a beneficiary may have to pay any income tax due if they receive income from your pension pot.

As mentioned earlier, if you die before the age of 75, beneficiaries can receive money from your pension tax-free. If you die after 75, beneficiaries may have to pay income tax, and if they do, it will be at their usual income rate.

Can I transfer my pension fund to another provider

Now that employers must provide workplace pensions by law for those earning £10,000 per annum or more, many people amass several pensions throughout their working lives as they change employers. Some pensions perform better than others, and you might ask yourself:

  • Can I transfer my pension to another provider?
  • Can I move my SIPP to another provider?

Generally speaking, the answer to “Can I move my pension to another provider?” is yes, you can, but you need to check with your pension provider first to make sure you have the option.

If you want to initiate a pension transfer exercise, we here at Moneyfarm can help.

Planning for your retirement

Knowing how to invest money for your retirement is crucial, especially as there is no longer a default average retirement age (apart from certain occupations). You might plan to retire early, but if you decide to continue working after the state pension age (currently 66), deferring your state pension is an option.

With so many private pension options available today, it can be quite confusing. It may be a good idea to talk to a financial adviser, especially if you decide to get a self-employed pension.

If you decide to contact a financial adviser, ensure they are authorised and regulated by the Financial Conduct Authority.

FAQ

What are the benefits of transferring my pension to my spouse after my death in the UK?

You give your spouse retirement security and peace of mind that they will be taken care of financially in the event of your passing by transferring your pension to them after your passing. The knowledge that your spouse will have their own source of income and be eligible for any pension benefits might also provide you peace of mind.

What is a pension sharing order in the UK?

A pension sharing order is a court order that can be used to transfer some or all of your pension to your wife in the UK.

Are there any tax implications for transferring a private pension to my spouse after my death in the UK?

There may be tax implications for transferring your pension to your spouse after your death in the UK, depending on the type of pension payment, the type of pension, the pension owner’s age at death, and the terms of your pension plan. Please seek the help of a financial advisor.

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*Capital at risk. Tax treatment depends on your individual circumstances and may be subject to change in the future.