750,000 could leave pension to wrong beneficiary

News


26 Jul, 2018

750,000 could leave pension to wrong beneficiary

More than 750,000 individuals who are nearing retirement could leave their pension to the wrong person when they die, according to research carried out by Royal London.

2016 figures from the Office for National Statistics (ONS) highlight that at least 1.3 million people between the ages of 55 and 64 have divorced and remarried, with 300,000 within this age group having previously been married but now cohabiting.

The insurer says that the issues typically come about when “people have told a pension scheme that they want any payments after their death to go to a first spouse, but they subsequently divorce, remarry or form a new partnership”.

On joining a pension scheme, people are required to fill in an ‘expression of wishes’ document outlining their beneficiaries on death. But, Royal London noted: “These forms are often not updated to reflect people’s changing personal circumstances such as divorce or remarriage meaning that an ex-partner could be in line to receive pension death benefits”.

Helen Morrissey, Royal London personal finance expert, explained: “Over the course of our lives, many of us will be in a number of different relationships. The person we want to receive any pension benefits after we are gone is likely to change over time.

“But if we have not told all of our past pension schemes about our new wishes and our new circumstances, there is a risk that the wrong person will stand to gain. It is important that people make sure that all of this information is kept up to date.