Expression of wish forms; what are they and why do they matter?

According to Royal London, more than 750,000 people are currently at risk of leaving their pension to the wrong person when they die.

Deciding who to leave your pension to is completely up to you. You can pass 100% to an individual or split the pension between multiple beneficiaries.

However, it is important to make sure that this paperwork is kept up to date, so that you do not inadvertently leave your pension to an ex, or unwanted beneficiary.

Expression of wish forms

When you first join a pension scheme, you will be asked to give details about the person or people you want to receive your pension if you pass away. That may also include the beneficiary for any death in service benefits if you are an employee.

These forms contain details about how you wish your benefits to be handled upon your death including:

  • Beneficiaries’ names
  • Contact details for beneficiaries
  • Percentages to be given to each beneficiary

Why does it matter?

If nothing changes between completing these forms and your death, then you and your loved ones should not be affected.

However, it is rare that someone will have no need to update their circumstances.

Research using data from the Office for National Statistics (ONS) shows that, among 55-64-year olds, roughly 773,000 people are divorced and have entered a new relationship since the split.

If you are one of them, would you want your pension pot to go to your former spouse, or your new partner?

There’s no wrong answer, but if what you have previously chosen, and what you want to happen are different, updating your preferences should be a priority.

Divorce rates are increasing

Divorce rates rose by 5.8% between 2015 and 2016 (Source: ONS), whilst the number of marriages is trending downward. Divorces are much less taboo nowadays, and more and more couples are choosing to separate and re-partner in later life than in previous generations.

That means more and more people are left to make important decisions about how their pensions are distributed on their death.

But, without communicating any changes to their pension provider, they could unintentionally leave their loved ones in a dangerous financial position.

Updating your expression of wish details

It is not just a change in relationship status that makes it necessary to update your preferences. You should aim to update your details if:

  • A new child is born into the family
  • A beneficiary gets married
  • A beneficiary’s contact details change
  • Your plans for retirement change

Throughout life, you may wish to update the percentages you are leaving to individuals. This could depend on their current circumstances and lifestyle needs, which will change as they go through life.

Updating your expression of wish preferences is simple, and you can make changes as often as you wish. Just remember that whatever it currently says, is what will happen if you die suddenly.

To make changes, contact your pension provider or company HR department. They will be able to tell you what plans you currently have in place and will help you to make any necessary changes.

Protecting your legacy further

Two thirds (63%) of UK adults currently do not have a will in place, according to research by Macmillan Cancer Care.

Of those aged 55 and over, 42% are leaving the division of their assets to chance, rather than setting out their wishes in advance.

If you have a will in place, when did you last review it to make sure that it reflects your current wishes and is valid?

It is recommended that you review your will at least every five years, though you may wish to make these checks more frequent if you are older or suffer from a serious illness.

What affects a will?

Did you know that, if you have married or divorced since your last will update, it will no longer be valid?

Unfortunately, Macmillan’s research shows that 1.5 million (8%) people are unaware that their recent marriage has invalidated their wishes.

Even more troubling, is the 20% of people who know that their will needs to be updated but have put off doing it. These people admit to procrastinating about:

  • Removing an ex-partner
  • Including a new partner
  • Removing an unwanted beneficiary
  • Adding children or grandchildren as beneficiaries

The effects of a valid will

Ensuring that your will is valid and reflects your current wishes will save your family and loved ones from making difficult decisions. Without a valid will, your estate will be subject to the laws of intestacy, which could mean that:

  • Your dependents become subject to social care
  • Your money is given to people you would not have chosen
  • Your assets are sold instead of being kept in the family
  • Your final wishes regarding your funeral and body are unknown

To discuss your estate planning further, contact us on 02380 633636 or request a call back by clicking here.