When you think about your retirement goals and leaving a legacy, it is important to remember to check you have an up-to-date Expression of Wishes (EoW) form
What is an Expression of Wishes form?
Put simply, an EoW (sometimes referred to as a pension nomination form) is a way for you to nominate choose who will inherit your pension when you pass away.
In the UK, you cannot leave your pension savings in your will, so if you were to pass away before taking your private and/or company pension, then the pension provider or the pension trustees have to decide where your pension savings go. By filling in an EoW, you are telling your pension provider who should inherit your pension savings.
EoW’s aren’t legally binding for the provider to fulfil, but they will take your wishes into account when deciding who to pay your pension out to.
How do I choose my beneficiaries?
Whilst it isn’t mandatory to choose a beneficiary or fill out an expression of wish form, it is recommended.
When you start a new job or sign up to a new pension scheme you will be provided with an EoW to fill in. You will be asked:
- Name, NI numbers, pension account number
- The name, address, DOB, and relationship of your beneficiaries. Can be one or several people.
- Percentage of savings you’d like each beneficiary to receive. Different percentages for different people, as long as it all adds up to 100%.
Can I make changes to the beneficiaries in the future?
You can update your expression of wish as many times as you need to. All you need to do is contact your pension provider. You may be able to access the form online through your account with your pension provider. If you do not have an online account with your pension provider, you can call them and request they send you a copy in the post.
Who can I nominate to inherit my pension?
Depending on the type of pension you have, and who your provider is, there will be rules on who you can nominate to receive your pension on your passing.
• Money Purchase pensions (also known as 'defined-contribution' pensions) are how all private and most workplace pensions work. This is where your contributions are invested in the market and the value of your pension is based on the underlying investments.
For these, anyone can be named – this could be a partner, relative, children or a friend. You can also usually nominate charities, if you wish to.
• Final Salary Schemes (also known as 'defined-benefit' pensions) are where you get a set percentage of your 'final' or 'average' salary each year in retirement, for the remainder of your life.
For these, you can't just nominate anyone, but you can nominate people in accordance with the scheme rules. These vary between providers, so you'll need to check with yours.
Important: If you nominate someone who's under 18, a pension provider will usually only be able to pay out to them if a trust or other suitable arrangement has been set up for them.
Ensure your wishes are up-to-date after life events
Don't think of this form as a "one-off". As we've mentioned above, you can update your form at any time – but this becomes important when your circumstances change. For example, if you split up with a partner and don't change your wishes form, your ex may get the payout from your pension.
Will the pension provider honour my wishes?
As mentioned, you can nominate whoever you want to receive pension savings – it could be a partner, relative, child, or a friend.
While an expression of wish form is an important indicator of what you want to happen, and the pension provider will take into account, it's still up to the discretion of the provider as to who it's actually paid out to. There might be circumstances when the provider decides not to follow your wishes.
For example, if your expression of wish states that you'd like a friend to receive your pension fund, but you'd since had young children without updating your wishes, then the pension provider should also take your children's needs into consideration. Or if you've remarried, yet your expression of wish is older and names an ex-partner, the pension provider will have a duty to make sure that your savings go to the most appropriate person.
What happens if my beneficiaries pass away before me?
If it isn't possible to pay the pension savings to the beneficiaries you have named on your expression of wishes, your administrator will assess your circumstances and choose different beneficiaries.
You could consider naming alternative beneficiaries. For example, your expression of wishes could state that you would like to leave your pension to your spouse, but if they've died before you, you could state that you would like the funds split equally between your children.
Naming an alternative beneficiary will give you more certainty over what will happen to your funds. However, as mentioned above, you should be wary not to make your expression of wishes too complicated (for example, by giving several alternative scenarios) as this is more likely to result in ambiguity and complications.
