SIPP beneficiaries

onomatopoeia99

This also applies to the auto-enrollment pension provided by my employer at the minimum 5%/3% level and operated by "Creative". I'm over a decade off state pension age so not looking to drawdown any time soon.

My SIPP (with HL, though I don't think that matters) asks me to nominate one or more beneficiaries to pass the pension on to when I die.  It also calls it an "expression of wishes" and reading around (including an article on MSE) many providers suggest such nominations will be "taken into account" when they decide who the pension goes to rather than being binding on the provider.

What I'm keen to understand is under what circumstances pension providers won't honour the expressed wish of the deceased? There seems no concrete information on this.

My nominated beneficiaries are a local charity and two unrelated friends.  I'm unmarried and have no dependents as defined in the documentation accompanying the beneficiary nomination form (and this is extremely unlikely to ever change). Those things should be irrelevant to the question as it's not specific to my current circumstances and I may change who I nominate in future, but I've provided them in case people ask!

QrizB

onomatopoeia99 said:

My SIPP (with HL, though I don't think that matters) asks me to nominate one or more beneficiaries to pass the pension on to when I die.  It also calls it an "expression of wishes" and reading around (including an article on MSE) many providers suggest such nominations will be "taken into account" when they decide who the pension goes to rather than being binding on the provider.

There are good tax rasons for this being discretionary rather than binding.

onomatopoeia99 said:

What I'm keen to understand is under what circumstances pension providers won't honour the expressed wish of the deceased? There seems no concrete information on this.

Typically it would require a significant change in your pesonal circumstances; divorce, mariage, parenthood, adoption, that sort of thing.

dunstonh

My SIPP (with HL, though I don't think that matters) asks me to nominate one or more beneficiaries to pass the pension on to when I die.  It also calls it an "expression of wishes" and reading around (including an article on MSE) many providers suggest such nominations will be "taken into account" when they decide who the pension goes to rather than being binding on the provider.

It is not specific to SIPPs.  It is to do with defined contribution pensions.   All DC pensions will ask for an expression of wish/nomination of beneficiaries.

What I'm keen to understand is under what circumstances pension providers won't honour the expressed wish of the deceased? There seems no concrete information on this.

Malicious nominations or our of date nominations where circumstances have changed

My nominated beneficiaries are a local charity and two unrelated friends.  I'm unmarried and have no dependents as defined in the documentation accompanying the beneficiary nomination form (and this is extremely unlikely to ever change). Those things should be irrelevant to the question as it's not specific to my current circumstances and I may change who I nominate in future, but I've provided them in case people ask!

Which is fine.

DRS1

QrizB said:

onomatopoeia99 said:

My SIPP (with HL, though I don't think that matters) asks me to nominate one or more beneficiaries to pass the pension on to when I die.  It also calls it an "expression of wishes" and reading around (including an article on MSE) many providers suggest such nominations will be "taken into account" when they decide who the pension goes to rather than being binding on the provider.

There are good tax rasons for this being discretionary rather than binding.

onomatopoeia99 said:

What I'm keen to understand is under what circumstances pension providers won't honour the expressed wish of the deceased? There seems no concrete information on this.

Typically it would require a significant change in your pesonal circumstances; divorce, mariage, parenthood, adoption, that sort of thing.

My recollection is that the tax in question is IHT.  I wonder if the process will change after 2027?

Albermarle

DRS1 said:

QrizB said:

onomatopoeia99 said:

My SIPP (with HL, though I don't think that matters) asks me to nominate one or more beneficiaries to pass the pension on to when I die.  It also calls it an "expression of wishes" and reading around (including an article on MSE) many providers suggest such nominations will be "taken into account" when they decide who the pension goes to rather than being binding on the provider.

There are good tax rasons for this being discretionary rather than binding.

onomatopoeia99 said:

What I'm keen to understand is under what circumstances pension providers won't honour the expressed wish of the deceased? There seems no concrete information on this.

Typically it would require a significant change in your pesonal circumstances; divorce, mariage, parenthood, adoption, that sort of thing.

My recollection is that the tax in question is IHT.  I wonder if the process will change after 2027?

No changes have been mentioned in regard to the new legislation about IHT.

Albermarle

What I'm keen to understand is under what circumstances pension providers won't honour the expressed wish of the deceased?

For example if the deceased filled in the form many decades ago and never changed it despite being divorced, remarried, having children etc .

The beneficiary is an ex husband who was in prison after murdering the deceased.

Etc

onomatopoeia99

Thanks for the replies, that makes it clearer. 

Aretnap

Apparently it's rare for the trustees not to follow the expression of wishes, and as the others have said, when they do it's usually because the expression of wish is clearly wrong or out of date, eg because of a major change in your circumstances since you made it. 

If you want to avoid doubt, updating the form at regular intervals, even if you're not actually changing anything, will mean that the trustees know they have a reasonably up to date expression of your wishes, rather than a list of who your best friends were 20 years ago which might merit further investigation.

sheramber

They look first at anybody who was dependent on the deceased. 

If you had a young child but nominated a friend they might override that and pay  out to the child.