Expression of wish forms: Who gets your pension benefits when you die?

Deciding who to leave your pension benefits to can be a challenge.

However, failing to inform your pension provider of changes to that decision can be even tougher for the people you leave behind.

According to research from Royal London, more than 750,000 people could be at risk of leaving their pension benefits to the wrong person for that exact reason.

How does expression of wish work?

When you first joined your workplace pension, you will have been asked to nominate the person or people you wish to benefit from your remaining fund, when you die. This would have included the option to split the pot between multiple beneficiaries or leave 100% to a single person.

When you die, the people or person you have nominated will receive the share you have assigned to them.

However, if you have since entered a new relationship, or welcomed new children or grandchildren into the family, your nominees may not be up to date or reflect your current wishes.

When should you worry?

Ideally, you should look at updating your details with your pension provider or HR department as soon as you become aware of the change. Of course, that simply is not possible for everybody and it is possible to forget about it as other responsibilities take priority.

You should review your expression of wish if:

  • You are no longer in a relationship with/ married to a former partner
  • It has been five years since you last reviewed your details
  • New children or grandchildren have been born into the family
  • Your beneficiaries’ details have changed (moved to a new house, gotten married, etc)

Does age have anything to do with it?

The unexpected can happen at any age, but if you are nearing retirement, you should check that your pension is in order and ready to support you when you finish work. That includes making sure that the beneficiary section reflects your current wishes and contains up-to-date information.

If you are one of the 773,000 older divorcees, who are now in a new relationship, updating your expression of wish form should be a priority.

Updating your details

You can review your pension preferences by contacting your pension provider or workplace HR department. They will be able to talk you through your options and help you to make any necessary changes.

You are not limited in how often you can update this information, so be sure to review and update as often as your lifestyle changes call for.

“None of this applies to me”

That’s great! Congratulations on keeping your pension paperwork up to date.

However, you are not immune. The divorce rate is steadily growing, with an increase of 5.8% in 2016. Meanwhile, the number of marriages each year is slowing down. That means that there are more people at risk of forgetting to take their ex off their pension paperwork and more opportunities for pension benefits to be paid to the wrong person.

While we’re on the subject…

It’s not a pleasant topic, but if you’re already considering who will benefit from your pension when you die, you may as well update, or create your will.

Your will is invalidated by both marriage and divorce, so any recent relationship changes should have triggered a will review. Either way, regular checks are recommended to keep your will updated and valid.

Unfortunately, it is more common than you might think for people to hold outdated wills which are either invalid, or do not reflect their current circumstances. In fact, research from Macmillan Cancer Support has shown that:

  • 42% of over 55s do not have a will
  • 5 million people have not updated their will since getting married
  • 20% of wills contain known mistakes

Of those ‘blunders’, many people admit that, if they died today, their current will would mean that:

  • Their ex would receive their assets
  • Their children or grandchildren would not be included
  • Their new partner would receive nothing
  • Their belongings would be given to people they no longer want to leave them to

Your next steps

Hopefully, you already know whether your expression of wish and will are up to date, but if not, the first steps you should take is to review them both.

As you check your documents, think about:

  • Who you want to leave your belongings and benefits to, should the worst become reality
  • Any new children who have been born into the family recently
  • Your relationship status and what you want to leave to your partner
  • How your dependents will be cared for if you die

We recommend that you spring clean your will and expression of wish at least every five years, but if you want to have a closer look at your finances and how your loved ones will fare if you pass away, it’s time to talk to a professional.

To get started, please get in touch with us on 0207 808 4120.