Research by the UK insurer Royal London has found that more than 750,000 could be at risk of passing on their pension to the wrong beneficiary when they die. The analysis found that around 773,000 people aged between 55 and 64 who are in at least their second relationship and may be impacted. Problems generally arise when a first spouse is listed as a beneficiary on a pension plan and this is not updated after divorce or remarriage. Unless paperwork is updated an ex-spouse may receive the pension.
Helen Morrissey, personal finance specialist at Royal London, said: “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.”
Adding to the complexity, as people change jobs more frequently, they may have a number of different UK pension schemes to manage. They may, as a result, forgot who was noted as beneficiary when a pension was first set-up.
This research provides a timely reminder for people to ensure they review their UK pension schemes at regular intervals and ensure both contact details and “expression of wishes” forms are kept up-to-date.