What is a pension beneficiary?

A pension beneficiary is the person, or people, that you name to receive the funds from your pension when you die. You could nominate your spouse, civil partner, children or other family members. You can also name charities should you wish to.

This is done by completing an Expression of Wish form for your pension provider, so that they are aware of your intentions upon your death. You can also use this form to specify the proportions in which you would like your pension funds to be distributed to multiple people.

This may become even more important with the expectation that pension funds will become subject to inheritance tax (IHT) from April 2027 onwards. There is hope that the Autumn Budget, scheduled for 28^th October, will give additional clarity on this.

If no beneficiaries are nominated, it would be reasonable to assume that your pension funds would be distributed in accordance with your Will. However, this is not the case!

Most pensions have a trust-based structure, which means that providers do not automatically follow the wishes laid out in your Will. They have discretion as to how the funds are distributed upon your death. Whilst some common sense may apply, naming beneficiaries is the best way to ensure that the people you want to receive your pension funds actually get them.

We have been working to identify any clients whose pensions do not currently have named beneficiaries and will soon be sending out Expression of Wish forms for your signature, but please get in touch if you have any questions or concerns in the meantime.

Even where there is a Will, this is not the way.