Expression of wishes – nominate beneficiaries for your SIPP
An expression of wishes allows you to nominate beneficiaries for your SIPP. You can nominate individuals, registered charities or trusts.
Please note that an expression of wishes tells the SIPP Trustee and Scheme Operator how you would like the remaining value in your ii SIPP to be distributed after your death. However, it is not an instruction for them to do so. It gives the Trustee and Scheme Operator the discretionary power to make the final decision on who is to receive those benefits, but the Trustee and Scheme Operator has a duty to act in your best interests. Read our expression of wishes FAQs for more information.
How to nominate beneficiaries for your SIPP
- Log into your online account and select sipp > expression of wishes.
- Click add expression of wishes and then add an expression of wishes.
- Select the type of beneficiary from the add a beneficiary menu.
Select add a dependant for dependants or add an individual beneficiary for anyone else.
You can also select a registered charity or trust.
- When entering the details of your beneficiary, please ensure you enter the correct information for each box.
- You can also add extra information in the notes section.
- Click add beneficiary.
- You can repeat this process to add additional beneficiaries.
- If you have any further instructions which you would like to be taken into account in the event of your death, you can enter these in the general notes section.
- When you are finished, click save changes.
Expression of wishes FAQs
- What is an expression of wishes?
- Why do I need to give an expression of wishes?
- Who can be nominated?
- Who is a dependant/nominee?
- Can I update my expression of wishes if my circumstances change?
- Can I give a binding instruction rather than an expression of wishes?
- How does the date of death affect taxation of benefits?
What is an expression of wishes?
An expression of wishes tells the SIPP Trustee and Scheme Operator how you (a member of the scheme) would like the value that remains in your ii SIPP to be distributed after your death. However, it is not an instruction for them to do so. It gives the Trustee and Scheme Operator the discretionary power to make the final decision on who is to receive those benefits, but the Trustee and Scheme Operator has a duty to act in your best interests.
Why do I need to give an expression of wishes?
Completing an expression of wishes is optional, but strongly advised. Its contents are not binding on the operator, the Trustee, your SIPP or the scheme. The Trustee and Scheme Operator has discretion to decide who should benefit from your SIPP funds on your death but will take your expression of wishes into consideration. The Trustee and Scheme Operator will also consult with your family and the executors of your will.
Where you have indicated a preference for payment of a lump sum to a beneficiary rather than pension income, the Trustee and Scheme Operator still retains discretion over the exact form in which benefits are paid. The Trustee and Scheme Operator may consult with your beneficiaries as to the way benefits are paid.
Who can be nominated?
You can nominate dependants, charities, trusts or any other individual to receive lump sum benefits. Only your dependants and other nominated individuals (known as nominees) can be considered to receive benefits as pension income.
The Trustee and Scheme Operator can only consider other individuals (i.e. anyone person not included in your expression of wishes) where there are no known dependants or nominees. Dependants who become known to the Trustee and Scheme Operator can be considered even if not included in your nominated beneficiaries.
It is important that the Trustee and Scheme Operator is aware of who might qualify as a dependant. Although enquiries will be made to ensure adequate provision had been made for all dependants, we recommend that you include them all in your expression of wishes and, having done so, ensure that you update these details as and when necessary.
If you wish to provide for minors as potential beneficiaries, you may wish to consider setting-up an appropriate trust (if you do not already have one). This could, for example, be to ensure monies they inherit can be used only for specified purposes, or from a specific age. The details of the trust can then be included in your expression of wishes. If considering using a trust, we recommend you speak with a solicitor.
If a beneficiary dies leaving unused flexi-access drawdown pension funds, he/she can pass those funds to a successor either to provide flexi-access drawdown pension through a successor's flexi-access drawdown fund, or to be paid as a lump sum death benefit. The tax treatment of the death benefits will depend on the beneficiary's or successor's age of death.
A charity can only be paid a tax-free lump sum if there are no surviving dependants, and the charity must be nominated by you before your death.
Lump sum payments to trusts may be subject to tax.
Who is a dependant/nominee?
A dependant is:
- Someone who was married to, or a civil partner of, the member at the date of the member's death (or if rules allow, at date of commencing pension).
- A child who has not reached the age of 23 or, if they have, who remains in full time education or was dependent on the member because of physical or mental impairment.
- Anyone else who was financially dependent on the member, had a financial relationship with the member of mutual dependence, or was dependent on the member because of physical or mental impairment.
A nominee is:
- Someone who is not a dependant of the member, who is instead nominated by the member to be considered for a nominee's flexi-access drawdown fund or lump sum death benefit.
- Someone nominated by the Trustee and Scheme Operator, but only where:
There are no dependants of the member.
There are no individuals nominated by the member.
There are no charities nominated by the member.
Can I update my expression of wishes if my circumstances change?
Yes. Amending your expression of wishes revokes any previous expression of wishes that you have made.
You should review your expression of wishes at regular intervals, particularly when there is any change in your personal circumstances.
Can I give a binding instruction rather than an expression of wishes?
No, we do not accept binding instructions as this would make any benefits part of your estate, and potentially subject to inheritance tax (IHT). Inheritance tax should not apply to discretionary Scheme Operator's decisions such as this and usually the payment is exempt.
Under current regulations, as the Trustee and Scheme Operator has discretion over the exact form of benefits and who receives them, both lump sum and pension income payments made to beneficiaries are free from inheritance tax. To maintain this exemption, you should not mention in your will how you wish your SIPP benefits to be distributed.
If you were to include in your will details of how your SIPP funds should be distributed following your death, these instructions are legally binding: they will no longer fall under a discretionary Scheme Operator's decision. This will mean that those funds are classed as part of your estate and will potentially attract inheritance tax.
How does the date of death affect taxation of benefits?
Death before age 75
Under current tax regulations, if you die before age 75 and provided that you have sufficient lifetime allowance available in respect of any uncrystallised fund, any unused pension funds will usually be paid tax-free to both individuals and non-individuals such as a trust or company.
In order for an inherited sum to be paid as a tax-free pension, it must be designated into a flexi-access drawdown fund within two years of the date of your death. For it to be paid as a tax-free lump sum, it must be paid out within two years of the date we receive notification of your death. (There may be exceptions to this time limit where a lump sum payment is to be made to a charity).
Death after age 75
Since 6 April 2016, payments of lump sums and as pension income made to an individual are subject to Income Tax at the recipient's marginal tax rate. Where a lump sum is paid to a non-individual, e.g. a trust or company, an up-front tax charge of 45% applies.
It is important to note that these tax arrangements may be subject to change: you may wish to discuss the impact of any changes with your tax or financial adviser.