Money guru Martin Lewis has imparted some crucial advice to divorcees to ensure that their pensions are not passed to their ex in the event of their death.
The Money Saving Expert founder took to social media to warn that one simple mistake could mean your former partner getting their hands on your pension pot, reports the Express. He explained that a pension cannot be gifted in a will, and that if you want to ensure it goes to the right person you must take certain steps.
He tweeted: "Warning. Don't accidentally leave your pension to an ex! You can't leave pension savings in your will. Die before taking your private/company pension and the provider/trustees decide what to do with it."
The Hell Of A Read website reported Sarah Coles, personal finance analyst at Hargreaves Lansdown, as saying that anybody who experiences change such as divorce should obtain an 'expression of wishes' form from their pension provider and fill out one for each pension they have.
She said: “If you’re married, it will often go to your spouse under the rules of the scheme, but if you have split with your partner, your family could end up with the nightmare scenario of having to battle over money. It’s essential to check whether you've updated the form, because your pension could be worth far more than you think."
She added that the average pension pot for people aged between 55 and 64 who haven’t already accessed their pension is £107,300. People are advised to check workplace or private pensions to see what death benefits they offer.
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Many pensions will give your spouse or person you have named as heir a lump sum or let them inherit the remaining pension after you die. Spouses and civil partners may also be able to inherit some of your state pension payments after you die, although this is not paid automatically and they have to make a claim for the Additional State Pension.
The rules depend on whether the person who died reached the state pension age before April 2016 or afterwards, but typically any money your spouse is entitled to is added onto their state pension when they start receiving it. If your spouse or civil partner remarries, they could lose the right to inherit your pension. Mr Lewis also suggested that people rewrite their will if their circumstances change, such as splitting up from a partner.
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