Consumer advocate Martin Lewis has issued a warning to individuals with any type of pension pot, highlighting the importance of taking action to ensure their pension assets are distributed according to their wishes. Lewis emphasised that despite the large number of people contributing to workplace or private pension schemes in the UK, many are unaware that pensions cannot be included in a will. As per the latest data from the Department for Work and Pensions (DWP), around 22.3 million UK employees were saving for retirement through workplace pensions as of April 2023.
In the most recent edition of the MoneySavingExpert (MSE) newsletter, Lewis urged people to complete an ‘Expression of Wishes’ form with their employer to specify who should receive their pension in the event of their death. This form is a crucial step in ensuring that pension assets go to the intended beneficiaries. Lewis explained that without this form, providers or trustees will make decisions on the distribution of the pension assets, which may not align with the individual’s preferences.
Highlighting the need for regular reviews, Lewis advised individuals to check that their ‘Expression of Wishes’ form is up to date, particularly after any significant life events such as changes in relationship status. Lewis also addressed unmarried couples, underlining the importance of legal agreements such as wills, contracts, or civil partnerships to protect their assets and ensure their partners are provided for in the event of death.
For those with dependent children, Lewis stressed the significance of having a will in place to safeguard their financial future. He also mentioned the potential tax advantages of being married, especially in terms of inheritance tax and asset transfers. Lewis recommended considering a cohabitation agreement to clarify asset distribution in case of a relationship breakdown.
Lewis’s comprehensive guide on protecting family finances can be accessed on MSE.com for detailed information and advice on ensuring financial security for loved ones. The importance of proactive pension planning and clear communication with providers to secure the desired outcomes for beneficiaries was a key message in Lewis’s warning to pension holders.
As pension pots represent a significant portion of individuals’ financial assets, taking steps to protect and allocate these funds appropriately is crucial for effective financial planning. By following Lewis’s advice and completing an ‘Expression of Wishes’ form, pension holders can ensure that their hard-earned savings are distributed according to their intentions, providing peace of mind and financial security for their loved ones.