Who Gets Your Pension When You’re Gone?

Let’s be honest – thinking about what happens after we’re gone isn’t anyone’s idea of a good time. But here’s a quick reality check: do you know who’d get your pension if something happened to you?

If the answer is “hmm, not sure”, you’re far from alone. ​​Just 41% of UK pension savers know their pension would go to their nominated beneficiary when they die – and one in five don’t even know who they’ve nominated according to Money and Pensions Service, Talk Money Week 2023.

Many people assume it’ll automatically go to their partner or next of kin – but it’s not always that simple. That’s where naming a pension beneficiary comes in.

This guide breaks it all down: what a beneficiary is, why it matters, and how to make sure your pension ends up in the right hands. And don’t worry – we’ll keep the heavy stuff light and the jargon locked safely away.

What is a Pension Beneficiary?

In simple terms: it’s the person (or people) you’d like to inherit your pension pot when you’re no longer around. It could be your partner, a friend, your kids, or even a charity close to your heart. You just need to let your pension provider know – usually through a quick form called an expression of wish.

Think of it as your pension’s “in case of emergency” plan. It’s your say in where your savings should go – and a simple step that can make a big difference to the people you care about.

Why Bother Nominating Someone?

Short answer: it gives you control over where your pension goes when you pass. Longer answer: it also makes things smoother and faster for your loved ones if the worst were to happen.

By naming a beneficiary, you’re leaving clear instructions – “this is who I want to receive my pension”. This reduces potential guesswork, legal limbo, and stress for your family.

Without a named beneficiary, things can get complicated.

Legally, it’s up to your Pension Trustees to decide who receives your pension when you die. But if you’ve nominated a beneficiary, they’ll take your wishes into account - and there would need to be a good reason not to follow them. In most cases, your nomination helps make things clearer, quicker and more likely to go the way you intended. By naming someone, you make your wishes known. It also often means the money can be paid out to your loved ones faster.

The Risk of Not Updating Your Beneficiary

You might think you’ve already done it and that this doesn’t apply to you. But big risk alert: if your nomination is out of date, things can get messy.

Maybe you filled in a form years ago and haven’t touched it since. Life changes and your wishes might too. That ex you’ve not spoken to in a decade? Still first in line if you don’t update your nomination.

Maybe you’ve filled it in for one of your pensions – and not the others. The average person has nine pensions lying around – so make sure each one reflects your current wishes. Penfold can help you bring them together in one place to keep things tidy and up to date.

Moral of the story: don’t leave it to chance. It’s worth ensuring your beneficiary still reflects your wishes – and knowing when to check it is just as important…

When to Review Your Beneficiary

Big life events are usually a good cue to ask, “Does my chosen beneficiary still make sense?”. Major milestones like:

• You get married or start a new relationship
• You split up or get divorced
• A new child (or grandchild) enters the picture
• A loved one passes away
• You get a new job (and perhaps another pension!)

The good news is updating a beneficiary is usually quick and easy, and you can do it as often as needed. It’s far better to spend a few minutes updating it now than to let an outdated choice create trouble later.

How to Change your Penfold Beneficiary

1. Tap the ‘Profile’ menu and then ‘Beneficiaries’
2. Add or update your beneficiaries details - name, relationship to you, address, phone number and % portion of benefits to receive
3. Tap ‘Save’ and you’re done!

If you’re already a Penfold customer, log in now and add a beneficiary for future peace of mind. Or, get started with Penfold today.

Update your Penfold beneficiary

A Small Step That Makes a Big Difference

Nominating a pension beneficiary might not be top of your to-do list, but it’s one of the simplest ways to protect your loved ones and make sure your money ends up in the right hands. By taking a few minutes to check your current nomination (and update it if needed), you’re avoiding future admin headaches and giving yourself real peace of mind.

It’s also worth knowing that pensions can sometimes be taxed when they’re passed on. It usually depends on how and when the money is paid out, and how old you are when you pass away. We’ll cover this in more detail in a future article – but in the meantime, you can find out more on GOV.UK: Tax on a private pension you inherit.

For now, the most important thing you can do is nominate (or double-check) your beneficiary. It’s a small action with a big impact.