75% of Pension Members Not Completed Pension Wills

Research by Canada Life has found that three quarters of the UK population have not completed or updated their ‘Expression of Wishes’ on death for their pension scheme.  The so called ‘Pension Will’.

Many people are not aware that most pensions schemes are:

1. Discretionary Trusts meaning that the scheme trustees will pay out pension member death benefits, at the trustees’ discretion, to loved ones.
2. As your pension scheme is a trust it does form part of your estate on death for inheritance tax purposes and, it is not covered by your Will.
3. You can completion an ‘Expression of Wishes’ on death firm, giving pension trustees guidance on who you would like to inherit your pension benefits on death.  This is merely an indication of what you would like to happen on death and is not binding on the trustees (i.e., discretionary) but trustees will take account of your wishes when distributing any pension death benefits.

Pension schemes such as defined benefit schemes usually and automatically have a spouses benefit on death e.g., a 50% surviving spouse or dependent pension on death.  So, these do not present a problem.

The problem lies with investment linked, defined contribution pension funds such as personal pensions, flexible drawdown pensions and workplace pensions where the pension fund value is paid out on death to beneficiaries.  It is these types of pensions that really do need an expression of wishes updated.

Reasons to update Expression of Wishes

• Divorce.  Do you really ant your ex-partner to inherit your pension fund on death.
• Spouse or partner predeceases you.
• You want children, grandchildren, or other relatives to benefit from your pension fund on death.
• If you die before age 75, your loved ones may inherit the pension fund free of income taxes and inheritance taxes for life.

We can help you with completing or updating your Expression of Wishes or Pension Will on death.

Contact  Call Back  Calculators  Our Fees