One of the most significant elements of many people’s estates – their pension – is at risk of going to the wrong person, according to mutual insurer Royal London.
Their warning comes in the wake of figures published by the Office for National Statistics on the growing numbers of older people getting married and divorcing – the so-called “silver splicers” or “silver splitters”.
These stats, together with a failure to change one’s will, pose a growing risk that people’s pension benefits will go to the wrong person after they die, say Royal London.
Many pension schemes have forms which allow scheme members to nominate who will be the “beneficiary” if the member were to die. This could cover the payment of an ongoing pension to a surviving widow or widower and/or payment of lump-sum benefits.
This includes pension rights that you may have built up when you worked for previous firms.
But if the form is not updated when someone changes their marital status, an ex-spouse could end up receiving the benefits at the expense of a current spouse or partner.
It also means that children and stepchildren of a new relationship may not be provided for.
If information is out of date, scheme trustees and administrators can undertake their own investigations to decide who should be paid. This can include looking through Wills, speaking to family, friends or colleagues to work out the personal circumstances of the deceased at time of death.
However, keeping nomination forms updated can make the process much quicker – avoiding difficult disputes and helping to ensure that your money goes to the right family members.
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