New research from the Money and Pensions Service (MaPS) has exposed that many UK pension holders are uncertain about what happens to their pensions after death.
According to a talk money week 2023 survey, only 41% of people know their pensions go to nominated beneficiaries, leaving the majority in the dark.
Almost a quarter of respondents (23%) wrongly believed pensions automatically go to next of kin, while 11% said they didn't know. Some thought they go to the Government (11%), employer (8%), or pension provider (7%).
In light of the survey results, MaPS urged action, prompting pension holders to verify beneficiaries to prevent loved ones losing out due to outdated details.
The survey also revealed that 20% of pension holders don't know their nominated beneficiaries, with 47% knowing who they had chosen for all pensions.
In related findings, about three quarters claim to have updated contact details for at least some pensions.
MaPS emphasised the importance of this initiative during talk money week, urging individuals to take control of their financial destiny, starting with understanding pension inheritance.
Jackie Spencer, head of pensions policy at MaPS, said:
"It's a difficult topic to think about and no one expects the worst to happen to them, but it's absolutely crucial that we make plans in case it does.
"People come in and out of our lives and if you have someone you no longer want as your beneficiary, they could end up benefitting at the expense of the loved ones you've left behind. These results suggest millions of people are running that risk.
"We're asking everyone to check they have the right beneficiary for each and every pension they hold. This can be done by contacting your pension provider by phone or online and it'll make all the difference if you pass away early."
Talk to us about your pension.