Six out of 10 pension savers risk their savings ending up with the wrong person, as they have failed to update ‘expression of wish’ forms.
Research by Hargreaves Lansdown found that only 38 per cent of people said they had kept this paperwork up to date for all their pensions. A quarter (26 per cent) said they had not, while a further 13 per cent were unsure.
Expression of wish forms allow savers to nominate who will receive pension death benefits when they die. Although some scheme will give trustees or administrators discretion to ensure these are paid to current partners or family, others are required to pay out to the person named on this form, even if this is an ex-partner from decades before when the scheme was initially set up.
Hargreaves Lansdown senior pensions and retirement analyst Helen Morrissey says: “Updating expression of wish forms is easy to put off but doing so risks causing real problems for your loved ones in the event of your death.
“One example could be pension benefits going to an ex-partner when you may well have settled down and even had a family with someone else. Alternatively, they could go to a family member who you have since fallen out with.
“We move jobs several times during our career and auto-enrolment means we likely will have a pension in every job, so care needs to be taken that these forms are updated to save your loved ones from a nasty shock and potential financial difficulties.”
She adds that pension scheme administrators and trustees can make enquiries about whether the person named on these forms continues to be the right person, but if they can’t track down your loved ones then this can prove difficult.
Morrissey says those running pensions schemes will also have different responsibilities depending on how the pension is set up. “If it is set up under discretion, then administrators and trustees can amend the beneficiaries if they find the ones on the form are outdated.
“However, if the pension is set up under direction then they have no such discretion, and the benefits must be paid out to the person named on the form.”
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