Over 750,000 people nearing retirement are at risk of leaving their pension to the wrong person when they die, according to research carried out by Royal London, and those aged between 55 and 64 are most vulnerable.
Data from the Office for National Statistics for 2016 show that at least 1.3 million people aged between 55 and 64 have divorced and remarried, and a further 300,000 people in this age group have previously been married but are now cohabiting.
The firm believe that the problems arises when “people have told a pension scheme that they want any payments after their death to go to a first spouse but they subsequently divorce, remarry or form a new partnership”.
When enrolling on to a pension scheme, members are asked to complete an ‘expression of wishes’ form detailing who they wish to receive any death benefits. However, Royal London reported that “these forms are often not updated to reflect people’s changing personal circumstances such as divorce or remarriage meaning that an ex-partner could be in line to receive pension death benefits”.
Royal London personal finance specialist Helen Morrissey commented: “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 over time.
"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.”
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