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Three in five ‘pension will’s out of date

Three in five 16-54 year olds (61%) said their nominated beneficiary or expression of wish form is out of date, or don’t know the position, according to new insight from Canada Life. Only 39% of people confirmed their form was up-to-date according to the research.

Out of date expression of wish forms at the very least can lead to delays when trustees are making payments to beneficiaries, and in the worst case scenario could lead to the wrong beneficiaries receiving payment, Canada Life says.

Andrew Tully, Technical Director at Canada Life, said:

“An expression of wish form is a vital piece of the pension jigsaw. Anyone who has a pension would have been asked at outset to complete a form to nominate who should receive the benefits of the pension in the event of their death.

“Given the complexities of life and how things can change so quickly, it is hardly surprising many people said their form is out of date. But that shouldn’t excuse the fact these forms are vital to help pension trustees and scheme administrators pay benefits not only quickly and efficiently, but to the right people. Think of them as a ‘will for your pension’ and ensure you keep it up to date if your personal circumstances change.

“This approach continues into retirement if you have decided to use drawdown to manage your finances, as again, any pension funds beneficiaries stand to receive will be paid more quickly and to the right people if the form is current. In addition, as the legislation is more complex than it needs to be, nominating people is likely to allow more flexibility for benefits to be passed on in a tax efficient way.”

What are death benefit expression of wish forms?

Who gets pension savings following the death of a member is usually down to the discretion of the trustees or scheme administrator. In order to help them make these decisions, members can complete an ‘expression of wish’ or ‘nomination’ form. This allows the member to document what they want to happen to their money when they die. Although not legally binding, the forms are used by pension scheme trustees and administrators to speed up the distribution of funds to nominated beneficiaries. Often there can be complicated family situations so there may be a desire to include multiple people on the nomination form.

The pension company, sponsoring employer or drawdown provider will have asked the customer to complete an expression of wish form at the outset of the pension being started, or at the point the drawdown plan was started. It can normally be updated at any time so should be reviewed regularly, especially if family circumstances change, or as the member crosses the age 75 threshold when the tax status of benefits changes.

Pension scheme trustees or administrators will always take into consideration an expression of wish form, often in conjunction with a valid will.

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Canada Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

Canada Life International Limited and CLI Institutional Limited are Isle of Man registered companies authorised and regulated by the Isle of Man Financial Services Authority.

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Stonehaven UK Limited and MGM Advantage Life Limited, trading as Canada Life, are subsidiaries of The Canada Life Group (U.K.) Limited. Stonehaven UK Ltd is authorised and regulated by the Financial Conduct Authority. MGM Advantage Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.