My partner and I are separating: when should I update the beneficiaries nominated on my pension?
When individuals are going through a separation and then a divorce / dissolution of a civil partnership, there are so many things to consider that it would be very easy to miss the fact that your ex is still the nominated beneficiary on your pension. For those who have specified a partner or spouse as a pension beneficiary and failed to update their wishes, there is a real risk that their remaining pension benefits will still pass to their ex on death.
Pension benefits typically fall outside of a person’s estate, so, they are not covered by the terms of your Will. If you are invited to name a beneficiary for your pension pot by your pension provider, you will need to complete an ‘expression of wish’ or ‘nomination of beneficiary’ form. These are common with workplace pensions or private pension schemes. If you have previously nominated your ex, but then separate from them and forget to update your beneficiary, the pension scheme’s trustees may be obliged to honour the wishes you have confirmed as set out in that expression of wish or nomination. This is despite the fact they were unlikely to be your current wishes.
It is important to remember that the nomination of a beneficiary for your pension is dealt with entirely separately from any orders that may be made by the Family Court about what should happen with your pension on divorce / dissolution of a civil partnership. Don’t assume that just because you inform your pension provider that you are separating or that a Pension Sharing Order has been made this will be sufficient for your pension provider to update the nominated beneficiaries on your pension automatically. This is a separate step you as the pension holder need to take, ideally as early as possible.
There are some simple ways to avoid giving your ex an unintended pension windfall:
- keep a clear and up to date log of all your pensions and any nominations made. This will help you to remember which providers you have pensions with and who you have nominated as your beneficiaries for each of them. Make sure your family can easily access this information in the event of your death;
- contact your pension providers if you are unsure, to double check who your named beneficiaries are. It can’t hurt to be too careful; and
- remember to review your nominated beneficiaries if your relationship circumstances change. There is no limit to how many times you can change the beneficiaries of your pension.
In addition to reviewing the beneficiaries nominated on your pension, following a separation you should also review the beneficiaries you have nominated on any life insurance, death in service policy or private healthcare policy. Again, this can be done by contacting the relevant provider.
If you have any concerns about the nominations you have made or how and when to change these, then please do get in contact with our specialist family team, who will be more than willing to advise on your specific circumstances.