Mortgage & Property

New Insurance Professional

Family Office Bulletin


Mortgage Property

Insurance Professional

Family Office

What are the pitfalls for clients of not having their pension death benefits nomination up to date?

Lorraine Denton

By Lorraine Denton, Chartered Financial Planner at Punter Southall Wealth

A reported increase 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 people’s minds on making sure that their affairs are in order and that their wealth is transferred to the right beneficiaries should the worst happen.

A pension makes cascading residual wealth to loved ones and future generations possible and can be very tax-efficient, because many pension funds fall outside the estate of the plan-holder on death and do not suffer Inheritance Tax. Making nominations is important to ensure that your wishes to leave a legacy are clear. Without a nomination, the benefit options on death are significantly reduced.

While arranging a will may be the first thought for many, equal consideration should be given to what happens to any 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.

So as a Financial Planner, what am I looking to do for my clients? Firstly, prior to ensuring that my clients achieve the best outcomes for their remaining funds on death, it is crucial for me that their wishes are identified, and everything is in place to get money in the right hands with the least amount of tax payable. It is vital to ensure that a client has the correct type of pension scheme and that they are optimising their pension savings; only then do we check that their death benefit nominations accurately reflect their current wishes.

It is at this point that it is imperative to ensure that integrated death benefit planning takes place, and that decision-making concerning pension death benefit choices is coordinated with decisions taken about the will.

As Financial Planners, we build good relationships with other business professionals to ensure the best outcomes for our clients. By working together, the Financial Planner and Solicitor will look at all aspects and implications relating to your will and death benefits. This may involve us all meeting together to finalise the advice.

This Week’s Most Read

  • Investing for the year ahead: eight funds and investment trusts for 2022

    The year end is a natural time for people to review their investment portfolios and ensure it is well positioned for the year ahead. Ryan

  • Is your art in the right place?

    By Arthur Byng Nelson, Solicitor and Legal Director at law firm Harold Benjamin. Introduction: Clients with Art For some wealthy individuals a great deal of

  • SJP celebrates its 1000th Chartered Financial Planner

    St. James’s Place (SJP) celebrates surpassing its 1000th adviser to achieve Chartered status. Former law graduate, Molly O’Donnell, came into SJP via the Academy and,

  • Invesco: Outlook for ESG in 2022

    By Cathrine de Coninck-Lopez, Global Head of ESG at Invesco. I have every reason for optimism in 2022. There is clear progress in the environmental,

  • Silent Cyber: a threat for financial advisers?

    By Chris Davies, Executive Director & Co-Lead of IFA Business Unit at Howden The way many of us work has seen a fundamental shift since

  • 7IM partners with Door to strengthen regulatory and stewardship strategies

    7IM today announces that it has partnered with Door, a company dedicated to improving due diligence processes, in a move that will assist the firm

  • Selling the family-owned business: Key considerations for families looking to sell and protect the family legacy

    By Richard Lane, partner in the Corporate and Family Business team at leading law firm Farrer & Co. For a family business owner, the smooth

  • AJ Bell Active v Passive Report 2021

    Only a third of active equity funds (34%) beat a passive alternative this year, according to our latest Manager versus Machine report Active outperformance was

  • The Fall and Rise of Structured Products

    In this episode Ian Lowes, the founder of Structured Products Review, speaks about why the pre-packaged investment strategy is so misunderstood, and how so many

  • Square Mile Academy of funds report ratings round up for November

    Five new ratings, including three Responsible ratings One rating upgraded One fund reintroduced to the Academy of Funds Analysts at Square Mile Investment Consulting and

Keep updated on the most important financial events 

Make sure you are an informed

wealth professional..

Adblock Blocker

We have detected that you are using

adblocking plugin in your browser. 

IFA Magazine