The charity which receives the payment must be a charity registered with the Charity Commission of England and Wales (or the equivalents for Scotland and Northern Ireland). So long as the payment is used for charitable purposes, it will be tax free irrespective of the age of the member at the time of their death. If the charity does not use the payment for charitable purposes, the payment will be an unauthorised payment.

It is important to strike a balance between lifetime gifting and ensuring that enough remains available for your clients to feel secure in their retirement.

While the options for using pension funds for charitable purposes are limited, they are worthy of consideration, particularly as pension savings are one of the largest assets retired individuals often have. 

Bethany Joslyn is technical consultant at AJ Bell