As a generalisation, if you die while still working, your pension fund will be passed to your spouse or civil partner, children or dependents at the discretion of the scheme trustees. In practise, if you have filled in your “Expression of Wish”, it will go to your chosen beneficiary.
If you have not completed some sort of expression of wish, the pension provider will make their best guess, but the priority typically is, spouse or civil partner, dependent children, non-dependent children, parents, then blood relatives in order of succession. If they cannot find a suitable beneficiary, it will be paid to the personal representatives dealing with the winding up of your estate.
You may wonder why the scheme trustees have so much power. This is because most pensions are a ‘trust’ arrangement, so in the event of your demise your pension falls outside your estate, avoiding Inheritance Tax, and can be paid to your dependents quickly before Probate is granted.
So, keeping your Expression of Wish up to date is vital if you want the right person to receive your pension funds. Otherwise you are leaving this important choice to the scheme trustees who may leave it to someone you’d not have chosen.
How can I get professional advice on my Pensions and Retirement Planning?
Please contact us at email@example.com or call us on 01223 792 196 to arrange an initial appointment, at no cost to yourself, with one of our Independent Financial Advisers.
About Martin-Redman Partners
We are a team of experienced Independent Financial Advisers who can advise on your personal or business financial arrangements. We have been building trusted relationships with clients for many years by articulating clear and tailored recommendations in areas ranging from investments to retirement planning, to complex estate planning advice.
The information contained is for guidance only and does not constitute financial advice. It is based on our understanding of UK legislation, whether proposed or in force, and market practice at the time of writing. Levels, bases and reliefs from taxation may be subject to change. Accordingly, no responsibility can be assumed by Martin-Redman Partners its officers or employees, for any loss in connection with the content hereof and any such action or inaction.