Recent research has found that more than half of the adults in the UK are unaware that their pension typically goes to the person who is named on their pension policy, and this is putting them at risk of leaving money to the wrong people.
According to the research, more than 60 per cent of adults in the UK have failed to review the recipients of their life insurance policy and 60 per cent have not reviewed their critical illness cover. Moreover, 65 per cent have not checked their personal pension, 61 per cent have not reviewed their income protection plan and 65 per cent have not looked at their redundancy cover policy.
This covers a huge number of people, as according to the latest figures published by the Office for National Statistics (ONS), there were 679,106 births in the UK and 101,669 divorces in 2017.
Meanwhile, as well as forgetting to review policies, more than half of the adults in the UK do not realise that their pension could be passed on to the person named on their pension policy documents, rather than the person that has been named on their will.
These figures suggest that there is an urgent need for people to become more engaged with their finances, especially their pensions, which savers have built over a number of years to secure a financially stable future for themselves and their beneficiary.
As one of the report’s authors commented, few people realise that pensions do not form part of the estate on death. This means that, unlike savings, investments and other assets, pensions go to the person written down on the original documentation, not the beneficiary in their will. It is therefore essential for individuals to check their financial policies regularly and keep their beneficiary updated.
To find out more about how Kirk Newsholme Financial Planning can help, please contact Richard Leonard at Richard.Leonard@knfp.co.uk or by calling 0113 204 4215.