Who Will Benefit? Why You Need to Fill Out an Expression of Wish Form for Your Private Pension
Like many people, I have a private pension through a workplace pension scheme at the company I work for; in fact, they just set up a new private pension system, and if I'm honest, I know the basics about how a private pension works, and how my pension savings are paid out and felt pretty confident that if I should die, my family would receive the payment; however, I recently found out that actually, that's not necessarily the case, and to be as sure as I can be that my 'legacy' goes to the people I want it to, I needed to fill out an 'Expression of Wish form', and I had never heard of it!
It's something that not just older people or those at a state pension age need to worry about; although thinking about who would receive your pension should you die sounds like something for later life, there is no time limit as to when you can start making informed choices about your pension pot.
I'm coming up to 50 years old, and I want to make sure my family have the option to take any lump sums of my pension or set up a drawdown where they can receive a regular income from my scheme in a tax-efficient way so I have made arrangements to set up an Expression Of Wish to my pension account, which you may find you need to contact your pension provider about for further information, as in my case it wasn't mentioned on my schemes online account.
What is an Expression of Wish form?
An Expression of Wish form is a document that allows you to state who you would like to receive the benefits of your private pension plan after you pass away. It is a non-binding request that lets your pension provider know who you want to benefit from your pension fund when you die.
It's important to note that an Expression of Wish form is not a legally binding document. However, it can be helpful for your pension provider to know who you would like to benefit from your pension, as they can take your wishes into account when making decisions about who should receive the regular payment of your pension and adhere to any applicable tax rules. (You can research the United Kingdom tax rules on the gov.uk website)
Who can benefit from an Expression of Wish declaration?
When you complete an Expression of Wish form, you can name anyone you want to benefit from your UK pension fund when you die. This can include your spouse, children, grandchildren, other relatives, or even charities.
You may nominate anyone, whether they are dependent on you or not. This may also include a body such as an institution or club, whether charitable or not. If you nominate more than one person and one of your nominees dies, the benefit payable to that nominee will potentially be divided equally between the remaining nominees.
If you nominate someone under 18 when you pass away, the benefits will be held in trust for them.
It's important to note that your pension provider will take into account any legal obligations that you may have, such as providing for a spouse or dependent children. However, they will also take into account any preferences you express in your Expression of Wish form.
Why is an Expression of Wish form important?
Completing an Expression of Wish form can be important for a number of reasons. Firstly, it can help ensure that your wishes are taken into account after you pass away. If you don't complete an Expression of Wish form, your pension provider will have to make decisions about who should receive your pension based on their own policies and legal obligations.
Additionally, completing an Expression of Wish form can help you to think about your own priorities and what you want your legacy to be. By taking the time to consider who you want to benefit from your pension, you can make sure that your wishes are clear and that you are making the most of your pension fund.
To ensure that your pension is properly planned, it's important to regularly review and update your Expression of Wish form as required. Not doing so can lead to complications, such as a scenario where a member marries for a second time but has nominated their children from a previous marriage. Although the member may still want their children to benefit, if the Expression of Wish form is not updated after the marriage, it may be open to challenge, leading to family friction and delays.
If possible, use your pension provider's own Expression of Wish form, as it will be drafted in line with their scheme rules, and any errors are more likely to be picked up upon receipt. However, if you find the provider's form insufficient, it's important to seek separate legal advice to ensure that your wishes are documented and legally binding.
In conclusion, completing an Expression of Wish form can be an important step in ensuring that your wishes are carried out after you pass away. By taking the time to consider who you want to receive the range of benefits from your pension, you can make sure that your legacy reflects your priorities and values.
Not got a private pension but are interested in getting one set up or seeing what the costs and expected payouts might be? Perhaps you want to combine separate private pensions into my account? If so, we suggest taking a look at PensionBee which has a great reputation and customer service.