Over 750,000 people coming up to retirement could be at risk of passing their pension to the wrong person when they die, according to research by Royal London. The problem arises where people have told a pension scheme they want any payments after their death to go to a first spouse, via an ‘expression of wishes’ form, and do not update the scheme paperwork if they subsequently divorce, remarry or form a new partnership.
Data from the Office of National Statistics for 2016 shows that:
At least 1.3 million people aged between 55 and 64 have divorced and re-married.
A further 0.3 million people in this age group are cohabiting after having been previously married.
A further 0.2 million people in this age group are cohabiting having never been previously married.
Based on the Wealth and Assets Survey, Royal London estimates that around 42% of this age group have pension rights, suggesting that over 750,000 could be affected.
Royal London has published a guide which explains the different sorts of pension benefits which can be payable when someone dies and how to make sure the right person gets them.
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 overtime. 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. It is important that people make sure that all of this information is kept up to date.’