A bypass trust is a discretionary trust set up by the member during their lifetime in anticipation of receiving any pension death benefits from the Cofunds Pension Account or the Suffolk Life Master SIPP on their death. A bypass trust could be beneficial where there are complicated family circumstances or where the beneficiaries are minors.

Things to consider:

  • The scheme trustees might not be aware of the full family circumstances and, as a result may not to be able to take these into account when exercising their discretion over the pension death benefits. In contrast, the member chooses trustees they trust to administer the bypass trust in accordance with their wishes. These trustees are more likely to know the family background, giving more control over who benefits and to what extent.
  • If the funds remain within the pension rather than passing to a bypass trust, the member’s dependant or nominee can nominate a successor to the pension when they die. This might not be someone that the member would have wanted to benefit.
  • If the member has a child who they fear may spend the pension lump sum irresponsibly, they might want the death benefits to be paid into a trust outside the pension. This allows the trustees to control how much the child receives, and when.
  • A bypass trust may help protect a beneficiary’s entitlement to means-tested benefits, as the trustees control what income or capital is paid to the beneficiary.

Set up a bypass trust

Cofunds Pension Account (CPA)

To set up a CPA bypass trust online, simply enter the details as you set up the CPA online. Or, complete the Bypass trust application form and send a copy to us.

Suffolk Life MasterSIPP

To set up a Suffolk life MasterSIPP bypass trust, complete Suffolk Life’s Bypass trust application form and send a copy to Suffolk Life, 153 Princes Street, Ipswich, Suffolk, IP1 1QJ, United Kingdom.

AJ Bell Investcentre SIPP

To set up a AJ Bell Investcentre SIPP bypass trust, complete the draft template available on the AJ Bell website.

Legal & General Portfolio Plus Pension

For Legal & General, you can find their Draft Pension Death Benefits Discretionary Trust form on their website.

We do not provide guidance on the suitability of when or how to use the Draft Bypass Trusts provided. These trusts (as indicated on the face of each of the documents) are provided strictly as drafts for the consideration of the client’s legal advisers, as to which is most appropriate and suitable for the client’s needs.