PSI25.2.16 - Flexibility in Pension Provision – Annuity Deferral/Income Drawdown - Widows', Widowers' & Dependants' Own Right Pension

(This archived guidance relates to HMRC discretionary practice before the 6th April 2006. For current guidance on Registered Pension Schemes see the Registered Pension Schemes Manual)

If the member dies during income drawdown, a widow's, widower's own right pension or annuity may be provided. The pension or annuity must not begin until the cessation of any pension or annuity payable under the terms of PSI25.2.15.

The amount must not exceed 2/3rds of the maximum permissible aggregate pension payable to the member immediately before the member's death. The aggregate amount of pension/annuity may be increased once in payment up to the level of the maximum initial pension or annuity and additionally by 3% for each complete year or, if greater, in proportion to the rise in RPI.

Where the category of widow, widower and dependants includes more than one person, separate pensions may be provided for each. No individual pension may be greater than the limit specified in the preceding paragraph. Where more than one is to be paid the total must not exceed the full amount of the maximum employee's pension on the basis described in that paragraph. Subject to these limits, the benefits may be shared in any proportions desired.