Expression of wishes guide

What is an expression of wishes?

An expression of wishes, or nomination form, tells your pension provider about your preferred beneficiary. It details who you would like to inherit any unused funds from your pension when you die.

You should be given the opportunity to fill in an expression of wishes form when you first start your pension, but if you didn’t do it at the time, you can complete one at any point. You just need to request one from your pension provider.

Why is it important to complete an expression of wishes form?

The legal structure of pensions means that it’s normally down to your pension provider to determine who receives any remaining funds when you die. You will hear this described as using its discretion.

However, if you have specified who you want to receive that money with a nomination form, the pension provider will, in the vast majority of cases, respect your wishes.

If you haven’t completed an expression of wishes form, your pension provider will need to conduct research to decide how to distribute your money. Although it would try to act fairly, it means your views wouldn’t be taken into account.

The fact that an expression of wishes form is not legally binding is, understandably, frustrating for pension savers. However, it’s this legal structure that enables pensions to fall outside your estate when you die and be free of inheritance tax (IHT). 

If you were to ‘direct’ your pension provider to pay death benefits to specific beneficiaries, rather than just expressing your wishes, the value of the death benefits will normally be counted as part of your estate for IHT purposes on your death.

Who can I nominate as a beneficiary?

Following the introduction of the pension freedoms in 2015, you can nominate whoever you like to be a beneficiary of your pension – they no longer need to be a dependent such as spouse or child.

This doesn’t necessarily have to be individuals either. You can also name trusts or charities as beneficiaries of your pension when you complete your expression of wishes form.

If you do not nominate a beneficiary, your pension provider can name a ‘nominee’ on your behalf when you die. But pension providers would always put the needs of surviving financial dependents before other individuals.

It’s also important to note that you cannot control so-called successors – that is who your intended beneficiaries pass your pension onto. Only an individual can be a successor. To be a successor that individual must have been nominated by a dependant, nominee or another successor of the member to receive benefits under the arrangement following their death.

→ Click here to add or update an expression of wishes with ii

How many beneficiaries can I name?

There aren’t any limits on the number of people that can benefit from your pension when you die. 

This can make it easier to share your wealth among wider family or friends when you die. However, it’s not always wise to over complicate things, especially if you haven’t taken financial advice.

Who is a dependant/nominee?

A dependant is:

• Someone who was married to, or a civil partner of, the member at the date of the member's death (or if rules allow, at date of commencing pension).
• A child who has not reached the age of 23 or, if they have, who remains in full time education or was dependent on the member because of physical or mental impairment.
• Anyone else who was financially dependent on the member, had a financial relationship with the member of mutual dependence, or was dependent on the member because of physical or mental impairment.

A nominee is:

• Someone who is not a dependant of the member, who is instead nominated by the member to be considered for a nominee's flexi-access drawdown fund or lump sum death benefit.
• Someone nominated by the Trustee and Scheme Operator, but only where:
  There are no dependants of the member.
  There are no individuals nominated by the member.
  There are no charities nominated by the member.

Why is it important to keep my expression of wishes up to date?

It is vital to update your expression of wishes form if your circumstances or preferences change.

For example, if you have started a new relationship, you might find that your pension is passed on to your ex, rather than your current partner.

Alternatively, you may decide you want to add further beneficiaries that you would like to benefit from your pension when you die, such as a family member or charity.

Again, if you have multiple pensions, you’ll need to update your expression of wishes for each, using their specific form.

Once your expression of wishes form has been updated or refreshed, it replaces any previous form.

Can a pension provider go against my expression of wishes?

It would be unusual for a pension provider to go against your expression of wishes, but it is possible. 

This is because pension providers need to show that they use discretion but also that they have a duty of care.

In addition to considering your expression of wishes or nomination of beneficiaries form, they may check your will and make enquiries about your marital status and whether or not you have any financial dependents.

This would likely involve conversations with your family as well as the executors of your will.

If it is considered that you have financial dependents who haven’t been adequately provided for, the pension provider could overrule your instructions to pay the money to other beneficiaries. 

For the purposes of pension death benefits, dependents will include a spouse or civil partner, children aged under 23 (or older if they are in full time education or are physically or mentally impaired) or somebody else that relies on you financially.

Beneficiaries that aren’t considered dependents, are referred to as nominees.

It’s important to note though that going against your instructions is not a decision that pension providers would take lightly.

Three steps to a successful expression of wishes form

• Keep it up to date: to avoid any problems or challenges after your death, make sure you update your expression of wishes for each of your pensions, whenever your circumstances change. This is particularly important if you divorce, remarry or have more children. Even if you aren’t actually changing some of the beneficiaries (for example children from a first marriage when you start a second), the fact that it has been updated acts as proof of your intentions and reduces the potential for problems down the line.
• Don’t overcomplicate things: It’s always best to keep things simple without trying to accommodate multiple different scenarios. Some expression of wishes forms will now give you the option to name additional beneficiaries in case your intended beneficiaries die before you. 
• Use the official paper work: You might hear about writing a letter of wishes, but rather than writing a note or sending an email, it’s better to use the correct form supplied by your pension provider.  This will have been designed in such a way that it catches all the information the pension provider needs and will be in accordance with the scheme rules. 

→ Click here to add or update an expression of wishes with ii