The pension freedoms introduced in 2015 brought about many changes. One of the biggest was the ability to pass a pension on tax-free. Under these new rules, you can pass on your pension to the beneficiaries you have nominated without an IHT charge.
This change places increased importance on the expression of wishes document in which you set out the details of your nominated beneficiary or beneficiaries. You probably don’t recall filling in this paperwork when you opened your pension. But as your pension could be a number of years older now, the person who you named as a beneficiary at the time might not be the person you would want your pension to go to now.
Why is it important to update these details?
It’s more important than ever to make sure that these details are up to date A worryingly high number of people forget to update these details, don’t realise that they can change them or didn’t even nominate a beneficiary in the first place! Others think that their Will automatically overrides the form, but this is not the case.
The expression of wishes form is not a legally binding document, but your pension provider or trustees will use this information to help decide how your pension proceeds should be distributed.
Assigning your pension benefits to the wrong person could be problematic, even more so if you have been through a divorce or are separated. With all the legal paperwork on top of the emotional turmoil, remembering to update a form that was sent with a pension application decades ago can be very difficult. An ex-partner could receive your pension benefits when they should go to a new spouse, partner, child or someone different altogether!
How we can help
If you’re unsure about your pensions and who your pension might be going to, call us on 01793 858211 or email firstname.lastname@example.org and we’ll be happy to help you.