Richard Porter, independent financial adviser and member of the St Albans financial planning team reviews how to leave your pension to the right person when you die.
According to Royal London over 750,000 people who are approaching their retirement are in danger of leaving their pension to the wrong person when they die. This particularly affects many people in their 50’s and 60’s who are approaching retirement. National Statistics Office data for 2016 confirmed that at least 1.3 million people aged between 55 and 64 divorced and remarried, and a further 300,000 people in this age group are now co-habiting following a previous marriage.
Richard Porter, independent financial adviser Lonsdale Wealth Management St Albans and member of the St Albans financial planning team said:
'When anyone enrols onto a pension scheme they are asked to complete an ‘expression of wishes’ form or provide a nomination of benefits letter. This form is really important as it details who the member wants their pension benefit to be given to after their death. However, according to Royal London their findings suggest that these ‘expression of wishes’ forms are not always updated if someone’s personal circumstances change. For example if a couple divorce an ex-partner may be in line to receive pension death benefits instead of their new spouse.’
Richard Porter, independent financial adviser Lonsdale Wealth Management St Albans continued:
‘Throughout our lives some of us could be involved in different relationships so the person we would like to receive our pension death benefit may change over time. Our Lonsdale Services independent financial advisers are aware of the requirement to update ‘expression of wishes’ forms so we will discuss this with our clients if their circumstances change. The need to discuss these forms could also occur at other times for example on the death of a spouse. The remaining partner would have to update their form and choose who to leave their pension death benefit to. There are other situations when it is important to discuss ‘expression of wishes’ forms. For example a couple with defined contribution pension schemes has the opportunity to leave any pension benefit on death to their children rather than each other. This can assist in inheritance tax planning as it would avoid a partner inheriting the pension benefit. As well as ensuring that our clients keep their ‘expression of wishes’ forms updated we also encourage all our clients to make a will and set up Lasting Powers of Attorney. We recommend that anyone who is considering estate planning or wants pension advice contact us on 01727 845550 for a free initial financial planning consultation.’
For more information read: Daniel Stansall IFA Barnet recommends setting up lasting powers of attorney; Lonsdale’s Barnet IFA’s recommend you regularly update your will