Over 750,000 risk passing pension to ex spouse after death

The problem arises where people have told a pension scheme that they want any payments after their death to go to a first spouse but they subsequently divorce, remarry or form a new partnership.

Unless the “expression of wishes” paperwork with the scheme is updated, there is a risk that an ex-partner could be in line to receive pension death benefits.

The average person is expected to have 11 different jobs during their working life and could therefore have as many different pension arrangements. While scheme trustees and providers will make efforts to consult the deceased’s will, speak to colleagues, family etc, in cases where the deceased has not worked for that company for many years it can be difficult to find these people. That could mean the pension goes to an ex-partner when the deceased could well have been living with, and had a family with, someone else.

Data from the Office of National Statistics for 2016 shows that at least 1.3 million people aged between 55 and 64 have divorced and re-married.

A further 0.3 million are cohabiting after having been previously married and 0.2 million people are cohabiting having never been previously married.

Based on the Wealth and Assets Survey, Royal London estimates that around 42% of this age group have pension rights, suggesting that over 750,000 could be affected.

Helen Morrissey, personal finance specialist at Royal London, said: “Over the course of our lives, many of us will be in a number of different relationships. The person we want to receive any pension benefits after we are gone is likely to change over time. But if we have not told all of our past pension schemes about our new wishes and our new circumstances, there is a risk that the wrong person will stand to gain.  It is important that people make sure that all of this information is kept up to date.”