25 February 2018

Over 750,000 people at risk of passing pensions to the wrong person when they die - Royal London

4 min read

Helen Morrissey, Personal Finance Specialist
Helen Morrissey

Corporate PR Specialist – Long Term Savings


Over 750,000 people coming up to retirement are at risk of passing their pension to the wrong person when they die according to research by Royal London.

Over 750,000 people coming up to retirement are at risk of passing their pension to the wrong person when they die according to research by Royal London.

The problem arises where people have told a pension scheme that they want any payments after their death to go to a first spouse but they subsequently divorce, remarry or form a new partnership. Unless the paperwork with the scheme is updated, there is a risk that any benefit for widows/widowers etc. will go to the ex-partner. Royal London has today (25th Feb) published a guide which explains the different sorts of pension benefits which can be payable when someone dies and how to make sure the right person gets them when you are gone.

When joining a pension scheme members are asked to fill out an “expression of wishes” form which outlines who should receive any death benefits. Trustees and pension providers will consult these forms when deciding how to allocate pension death benefits alongside consulting wills and speaking to family members. However, these forms are often not updated to reflect people’s changing personal circumstances such as divorce or remarriage meaning that an ex-partner could be in line to receive pension death benefits.

The average person is expected to have 11 different jobs during their working life and could easily have as many different pension arrangements. While scheme trustees and providers will make efforts to consult the deceased’s will, speak to colleagues, family etc., in cases where the deceased has not worked for that company for many years it can be difficult to find these people. That could mean the pension goes to an ex-partner when the deceased could well have been living with, and had a family with, someone else.

Data from the Office of National Statistics for 2016 shows that:

  • At least 1.3 million people aged between 55 and 64 have divorced and re-married
  • A further 0.3 million people in this age group are cohabiting after having been previously married. 
  • A further 0.2 million people in this age group are cohabiting having never been previously married.

Based on the Wealth and Assets Survey, we estimate that around 42% of this age group have pension rights, suggesting that over 750,000 could be affected.

Helen Morrissey, personal finance specialist at Royal London said:

"Over the course of our lives, many of us will be in a number of different relationships. The person we want to receive any pension benefits after we are gone is likely to change over time. But if we have not told all of our past pension schemes about our new wishes and our new circumstances, there is a risk that the wrong person will stand to gain. It is important that people make sure that all of this information is kept up to date."

- ENDS -

For further information please contact:

Helen Morrissey, Corporate PR Specialist – Long Term Savings

Note to editors

We estimate that there are around 773,000 people aged between 55 and 64 who are now in second or subsequent relationships and who may be affected by this issue.

We arrived at this estimate as follows:

  • We started our calculations by looking at the number of people within the age 55-64 age cohort. Data from the Office for National Statistics (ONS) show there were 6.7m people in England and Wales in this age group in mid-2016.
    - Read more about the estimates of the population for the UK, England and Wales, Scotland and Northern Ireland
  • We were also able to find out what proportion of people in this cohort had ever remarried. Again, ONS data shows approximately 20% of this cohort had remarried by the age of 50. This equates to 1.34m people who could be affected by this issue.
    - Read more about the marriages in England and Wales
  • We also looked at the number of people in this age cohort who are now cohabiting having previously been married as well as those who cohabit but had never been married before. ONS statistics show there were 338,630 people cohabiting who had previously been married and 163,538 people in this age group who were cohabiting having never previously been married.
    - Read more about the population estimates by marital status and living arrangements, England and Wales
    - Adding this to the 1.34m people who had remarried we arrived at a total of 1.84m. We then looked at what proportion of this age group has a pension. Data from the ONS Wealth and Assets Survey shows that 42% of this age cohort had pension wealth. This means that at least 773,000 people are currently at risk.

About Royal London:

Royal London is the largest mutual life, pensions and investment company in the UK, with funds under management of £117 billion, 8.8 million policies in force and 3,745 employees. Figures quoted are as at 30 June 2018.