Passing your pension on to the right person

The pension freedoms introduced in 2015 brought about a number of changes and one of the biggest was the ability to pass a pension on tax-free. Under the new rules, you can pass on your pension to the beneficiaries you have nominated without an Inheritance Tax charge.

Published on 27 Apr 20182 minute read

This change has led to the increased importance of the expression of wishes document which sets out the details of your nominated beneficiary or beneficiaries. You may (or may not!) recall filling in this paperwork when you opened your pension. As your pension could be a number of years old, the person who you named as a beneficiary at the time might not be the person you would want your pension to go to now.

Why is it important to update these details?

It’s more important than ever to make sure that these details are up to date. Despite this, we’ve found that a worryingly high number of people forget to update these details, don’t realise that they can change them or don’t even nominate a beneficiary in the first place. Others think that their Will automatically overrides the form, but this is not the case.

While the expression of wishes form is not a legally binding document, your pension provider or trustees will use this information to help decide how your pension proceeds should be distributed.

It seems obvious that assigning your pension benefits to the wrong person could be problematic, but it could be even more so if you have been through a divorce or are separated. With all the legal paperwork combined with the emotional turmoil, remembering to update a form that was sent with a pension application decades ago can be difficult. This could lead to an ex-partner receiving your pension benefits when they should go to a new spouse, partner, child or someone different altogether.

How we can help

Our experts work with clients to ensure they are fully aware of the new pension freedoms and are in a position to take full advantage of them. We will check with your pension providers who your named beneficiaries are and work with you to ensure that any necessary amendments are made.

Would you like to talk to a Coach about your pension?

If you know your pensions need some attention or you just want to make sure you’re doing all you can, why not book a free call with one of our Coaches.