Brits failing to update pension details after relationship break up

30 May 2018  A fifth of people with pensions in the UK (20%) have no idea who will inherit their pension pot when they die, according to research released by Scottish Widows. Surprisingly, 17% of divorcees don’t know who stands to inherit their pension, even though this could be their ex-partner. This figure rises to 28% among people who are separated from their partner.

Of those who were formerly in a relationship that has since broken down, just 24% say they updated their pension policy immediately, while half (50%) said they had no idea they needed to update their personal information. A further 16% did eventually update their policy, but waited for over three months to do so, with men more likely to update a pension policy when a relationship ends. More than a quarter (28%) of men do so straight away, versus just 20% of women. Three fifths of women (60%) don’t know they should be updating a policy, compared to 42% of men. 

Co-habitees are also leaving themselves exposed as there is no guarantee a partner would receive pension savings if they are not named as a beneficiary on the policy. Over a quarter (28%) of co-habitees are unsure who will inherit their pension if the worst were to happen.

Catherine Stewart, Retirement Expert at Scottish Widows, said: “A relationship ending can be a really stressful time and sorting out your pension may not be the biggest priority. However, it is important that you know who stands to inherit a pension when you die – for all you know, it could be an ex from many years ago.

“Likewise, just because you and your partner live together and are in a committed relationship, there is no guarantee they’ll receive your pension savings when you die unless you make specific requirements.

“We know that in general terms, women’s retirement prospects are worse than men’s. This is largely because of the persistent gender pay gap and maternity and other career breaks, which can all hold back women’s earning potential. That’s why it is even more important that women review their finances and who will benefit from pensions. Taking a few small actions can financially insure their future, and that of any dependents who could benefit from pensions after they’re gone.”

 

Scottish Widows has prepared the following top tips to ensuring you stay on top of your finances:

 

  1. Make sure you know who stands to inherit your pension pot when you die
  2. If you are co-habiting, many pension policies will require you to name that person on your policy as the beneficiary upon your death
  3. Periodically check all finances including pension pots, bank accounts and insurance schemes and ensure the right dependents and beneficiaries are named.
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