New data has emerged revealing that most British adults do not check the beneficiaries of their financial policies and could therefore be leaving money to the wrong people. As the UK’s departure from the European Union draws closer, it is advised that financial policies are reviewed.
Phoenix Life, Europe’s largest life and pensions consolidator, conducted a study where it emerged that 54% of UK adults are unaware that their pension typically goes to the person who is named in their pension policy rather than their will.
As family structures develop and relationships evolve, it is fundamental that financial policies are regularly updates in order to avoid complications later in life.
Over 2,000 UK adults took part in the study that revealed a significant number of policy holders do not review the recipients of their life insurance policy, critical illness cover, personal pension, income protection and redundancy cover sine they were established.
Additional statistics regarding personal pensions, beyond those found in the Phoenix Life study, show that the number of new female state pension claimants have dropped by over 202,000 per year. With the equalisation of the state pension age coming into motion, the number of female claimants has dropped significantly, though the male recipient figure has increased by 89,000.
“Few people probably know that pensions don’t form part of the estate on death, which means unlike savings, property and investments, pensions aren’t covered by wills,” Customer Director at Phoenix Life, David Woollett, said.
“People will most likely take out a number of different policies over their lifetimes – whether it’s a pension, life insurance, critical illness – and, as well as ensuring the the beneficiaries are updated as circumstances change, policyholders should inform their recipients about the policy, otherwise they won’t know to make the claim,” he continued.
Data from the study also shows that despite 47% of UK adults holding a personal pension policy, these are the least to be reviewed among policies. This is most notably alarming in South West England where 24% have reviewed their pension policy.
The political and economic Brexit-induced chaos is hitting most areas of British finance, including pensions. As uncertainty looms, it would be a good time to check the beneficiaries of your financial policies with the departure date drawing closer. Considering the impact of Brexit on your personal retirement savings is fundamental.
Market fragility caused by Brexit could significantly impact both your pension pot and your retirement income.
At 14:59 GMT Monday, shares in Phoenix Group Holdings (LON:PHNX) were trading at -0.40%.