For many people, the more flexible death benefits are the most attractive feature of drawdown. Conversely, the most negative part of an annuity is the absence of any lump death benefit.

On the death of the policyholder there are three options:

Lump Sum Death Benefit

• A surviving spouse or dependant may take the remaining pension fund as a capital sum, less a 35% tax charge.
  • The lump sum payment will be free of IHT, providing the correct trust has been set up.

Continued Drawdown

• A surviving spouse or dependant may continue making income withdrawals

Annuity Purchase

• A single life annuity can be purchased for the spouse or dependant without a guarantee period or value protection.