More than half of technical queries received over the past month by one of the largest independent SIPP operators, Curtis Banks, concerned the subject of death benefits.

Curtis Banks suggested that although these rules can be extremely flexible and tax efficient, they can also be complex, and that this has been an ongoing issue for advisers, rather than an isolated spike in queries over the past month.

Advisers are asking questions covering a wide range of topics, including detailed explanations of when beneficiaries’ drawdown is available, minors inheriting death benefits, tax implications in varying circumstances, as well as lifetime allowance charges.

Curtis Banks pensions technical manager, Jessica List, commented: “The amount of queries received on the subject of the death benefit rules is disproportionately high.

“It is such a key area now, with so much complication within the rules and variation between different providers, that advisers want to be confident that they’ve covered all bases in each individual case.

“There are high profile examples in the national press of what can happen when things go wrong – from long drawn out disputes through to detrimental tax implications for the beneficiaries – and advisers don’t want to risk their clients being caught out.

“The current rules can be extremely generous for beneficiaries, but this level of complexity and consequences seem an unnecessarily high cost to pay.”

Curtis Banks also suggested clients are requesting further clarity on how they can use expressions of wishes forms, ensuring clients can pass on their wealth as desired.

Ridgeways (FP) Ltd director, Kevin Blake, added: “Four years on from the introduction of pension freedoms, the death benefit rules are still overly complicated for advisers, let alone our clients.

“It is very easy for them to do something or forget to do something, such as not amending their expression of wishes if a beneficiary dies before them, which then causes problems when distributing the benefits. Reform of this system is badly needed.”

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