A reported surge* in people wanting to write or amend their wills at the start of COVID-19 (with some legal firms claiming a jump in demand of up to 76%), tells us that the pandemic has sharply focused peoples’ minds on making sure their affairs are in order and that their wealth is transferred to the right beneficiaries should the worst happen.
While sorting a will may be the first thought for many, equal consideration should be given to what happens to pension savings on death. Pensions are a significant part of private wealth for many. The ONS estimate** that 42% of total wealth in Great Britain is held in private pensions.
In addition, accumulated pension savings are playing an increasing part in transferring wealth to future generations, with many savers now preserving their pension funds and taking an income from other savings first.
It’s now possible for anyone to be nominated to inherit pension funds – not just “dependants”. Inherited drawdown allows pension wealth to pass to anyone and remain within the pension wrapper, available to them as and when they need it, rather than it being paid as a lump sum. And there’s no requirement for them to wait until they reach age 55 to access it.
We find that for those who don’t have an ongoing relationship with a trusted adviser, they don’t think about their pensions enough! You might be reading this and be surprised that you can pass a pension on to anyone (obviously if you are one of our clients reading this blog, you will know this already!).
Do you know if your pension offers this? Right pension
Do you know if your pension will go to your preferred beneficiary? Right nomination
Are putting off making these decisions? Premature death is something none of us want to think about but your existing arrangements might not offer these benefits. Right time
We think that this is important and knowing you and your family will be “ok” brings great peace of mind. If you would like to talk through your options please get in touch.
** ONS Pension wealth in Great Britain – Office for National Statistics