By not being aware of important pension rules, many may be unknowingly leaving a sizable pot of money to their exes. That’s because pension savings in the UK are considered a marital asset which can be divided during a divorce. An ex-spouse could, therefore, make a claim on a person’s pension when there is no legal binding agreement in place, even after a divorce. In fact, new research revealed that a staggering 25% of Brits admitted to being unsure of their pension’s final destination.
When it comes to pension savings, many Brits are baffled as to who will inherit this money with a recent Aviva survey finding that one in six adults in a relationship are completely unaware.
Those aged 79 and over see this figure rise to roughly one in five being unaware of the situation with the situation being further complicated when it comes to those who’ve had multiple marriages and divorces.
According to Aviva’s survey, roughly two-thirds (65 %) of people admitted their partner or spouse was their named beneficiary, whereas a fifth (20 %) selected a family member as their beneficiary.
However, cohabiting couples without legal marriage or having no civil partnership status generally mean they have no automatic rights when it comes to their partner’s pension upon separation or death.
As such, Aviva has strongly emphasised the importance of reviewing your pension beneficiary information, which, if not updated correctly, could be left to your ex-partner.
This simple and vital step will ensure your retirement savings are distributed according to someone’s wishes, reducing potential legal complications and emotional distress for all involved, added Aviva.
“It’s not surprising that people lose track of their pensions and therefore cannot remember who their pension beneficiary is,” said Jo Phillips, managing director of Aviva’s direct wealth business.
“Some pension policies will date back decades and it’s likely that many people will have changed jobs; moved house and even been married, divorced and married again, in the intervening years.
“The money in your pension pot is one of your assets, just like your savings or your possessions, so we would encourage all our customers to review their pension nominees and make updates as needed.
BTTJ Solicitors added: “Despite the fact that you and your ex-spouse may have separated some ten or fifteen years ago, if you remain married and have simply not yet gotten round to dealing with the divorce then your financial claims against one another including against one another’s Pension Funds remain live.”
For those concerned about how complicated this vital pension update could be, “some people may find they can update their beneficiaries quickly in their pension app,” added Aviva.
Philips reiterated this and added: “It’s easy to nominate a recipient. Most of the time, it can be done online without any fuss.”
