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Quarterly news:

Winter 2024

Retirement and pensions round-up

A recent survey by the Money and Pensions Service (MaPS) found that more than half of people don’t know what happens to their pension when they die.

It found that only two in five people knew that pensions go to a nominated beneficiary: and one in five didn’t know who had been nominated. Many incorrectly thought pensions passed automatically to next of kin.

There are specific rules about what happens to funds left in a defined contribution pension fund when someone dies. The funds are usually written in trust so that they don’t form part of your estate: death benefits therefore generally fall outside inheritance tax and are paid out at the discretion of the scheme administrator, to your chosen beneficiary.

It is therefore particularly important that the pension provider has an up to date record of who you would like to leave any such unused funds to. This is provided through what’s called a nomination or expression of wish form. Where circumstances change — on marriage, divorce, loss of a partner or birth of a child, for example, you might want to check that the beneficiary named on your pension provider’s records is still in line with your wishes, and notify of any change you would prefer.

Note that there are different provisions for defined benefit schemes: we can advise further here.

Pensions dashboards

Pensions dashboards are being developed to provide a single point of access, online, to information about all someone’s pension savings — including the State Pension. It’s a development sponsored by the government to help people engage with pensions savings, provide for retirement and make more informed decisions about accessing their pension savings. The aim is also to ‘reconnect individuals with lost pension pots’. When this will become reality is not yet certain, but it should be by 31 October 2026, and may take place before this.

The money midlife MOT

This is part of a digital offering from the government, designed to help take stock of work, health and finances. The financial side is created by the MaPS, and is aimed at those aged 45-65, who both live in and plan to retire in the UK. A short series of questions about your finances, attitudes to saving and budgeting, generates a personalised downloadable report with links to relevant sources of information.

To make efficient plans for later life and retirement, advice specific to your circumstances is needed. We can help you check that your affairs are up to date and optimally arranged to achieve your wishes.

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