Britons are being urged to spare five minutes to update their paperwork, to ensure the desired beneficiary inherits their pension pot.
Pension savings can’t be left in a will, but savers can complete an expression of wish form in case they die before retirement.
The expression of wish takes around five minutes to complete and allows people to highlight who they would like to receive the pension pot should they die.
It’s not legally binding, but this form would act as a guide for the pension provider when deciding who will get the pension savings.
Pension savers can fill out an expression of wish form within around five minutes
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Some 65 per cent of employees aged above 40 haven’t completed an instruction, according to Hargreaves Lansdown.
Only 14 per cent of those aged 19 to 39 have laid out their intentions, HL Workplace Solutions research shows.
Clare Stinton, head of workplace savings analysis at Hargreaves Lansdown: “Completing an expression of wish form is a five-minute task you can perform as part of your new year financial refresh that could save your loved ones from months of financial stress when you die.
“Without this, there are risks of delayed payments and your hard-earned money not being paid to your nearest and dearest.”
Hargreaves Lansdown said they are looking to raise awareness of an expression of wish form among workplace members, and have boosted the number of people updating this form from 19 per cent to 25 per cent over the last five years.
Ms Stinton warned that failing to update an out-of-date instruction could result in an ex-partner receiving the benefits rather than a current partner.
She explained: “Pensions are outside of your estate and so aren’t covered by your will and in most cases the final decision on who receives what rests with the pension provider.
“Pensions are typically the largest asset after the home and passing it on could make a real difference to your loved one’s lives.
“A clear instruction can quicken the administration process and ensure the money reaches your intended beneficiaries as soon as possible so it’s vital you update your expression of wish forms following key life events.
“With divorce rates on the rise, family dynamics are evolving, stepchildren and new partners could be overlooked if no expression of wish is in place. Completing the form enables you to personalise your plan, tailoring the distribution of savings to your unique family and financial circumstances.”
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An expression of wish is different to a death in service nomination, with the latter relating to a company-provided life assurance.
Expression of wish forms must be completed directly with a pension provider, and if a person has more than one pension, they will need to complete a form for each one.
Hargreaves Lansdown also warned pension savers will need to complement any expression of wish with estate planning documents and regularly check these also align with current circumstances.
Pension pots can be split in an expression of wish form, by allocating a percentage to numerous beneficiaries.
It’s also possible to set a primary beneficiary, followed by a second tier of beneficiaries. The latter would only be paid the pension savings if the primary has passed away.
