Passing on a pension to the right person

The pension freedoms of 2015 brought in a number of changes that have affected how people manage their personal finances. One of the biggest was the ability to pass a pension on tax-free. In turn, this has led to the increased importance of expression of wishes documents. Previously, nominating a beneficiary was a part of process to open a pension and then often forgotten about. However, as pensions now have a greater part to play in estate planning, it’s more important than ever to make sure that these details are up to date.

Despite this, many clients forget to update these details or think that their will automatically overrides the form. However, the pension provider or trustees use these documents alongside a will to help decide how the money should be allocated.

Assigning the benefits to the wrong person could be particularly problematic for clients who are divorced. Remembering to update a form that was sent with a pension application decades ago can be difficult. This could mean that a client’s ex-partner is in line to receive their pension benefits when in fact they should be going to a new spouse, partner, child or someone completely different.

At Tilney, we work with clients to ensure they are fully aware of the new pension freedoms and are taking full advantage of them. As a part of our pension review service we check with a client’s pension providers who the named beneficiaries are and work with the client and provider to ensure any necessary amendments are made. Our experts will also work with the client to ensure that their tax position and that of the beneficiaries are fully reviewed.