Over 750,000 people at risk of passing pensions to the wrong person when they die
Many people approaching retirement may be unwittingly naming an ex-spouse or ex-partner as their pension beneficiary upon their death. According to a Royal London study, out-of-date paperwork may put current partners at risk of missing out.
Over three quarters of a million people near retirement are at risk of passing their pension pot on to the wrong person when they die, new research by insurer Royal London has found. Those who have specified a partner as their pension beneficiary, only to divorce or separate but fail to update their wishes, are unaware that their remaining benefits may still pass to this ex-partner when they die.
The Royal London study looked at those aged between 55 and 64 who had remarried by the age of 50, who also had pension savings. It found that around 773,000 people were in this position, and therefore at risk of their pension being inherited by their former spouse or partner.
Pension benefits technically fall outside a person’s estate, so are not covered by a will. Savers who want to name a beneficiary of their pension pot must therefore complete an ‘expression of wish’ or ‘nomination of beneficiaries’ form when enrolling on a workplace pension or private pension scheme. If someone nominates their spouse, but then divorces and forgets to update this paperwork, the scheme’s trustees may be obliged to respect the original wishes. Read more about 'How your ex might still inherit your pension'.
At Cotswold, we have provide in house both will writing and pensions advice so if this may affect you please get in touch. Read the full article here.