More than half of people receiving a pension make mistakes or don’t know what would happen to their savings if they died, new research reveals.

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What is the difference between defined contribution and defined benefit pensions?What happens to your state pension?

One in four mistakenly believe that retirement funds will automatically be given to their next of kin, while others think the government, their employer or their pension plan keeps their money.

You can nominate a beneficiary of your pension using an ‘expressions of wishes’ form, but only two in five savers know this, according to the Money and Pensions Service.

Inheriting pensions: many people mistakenly believe that retirement funds will automatically be given to their closest relatives

MAPS, which is funded by the Government to provide free monetary help to the public, is urging people to complete these forms or, if they have already done so, to check that they are up to date.

But he warns that while pension schemes will take your wishes into account, they may not always follow them because they may exercise discretion over who ultimately benefits from your pension.

> Can your spouse inherit some of your state pension? Scroll down for information

If you have a final salary pension, benefits will be paid according to its rules and the trustees retain their discretion, explains MAPS in its pension inheritance help page.

“Some plans, but not all, may pay pension to a partner with whom the deceased member lived when the member died and who was financially dependent on the member,” he says.

“It’s important to check with your plan to find out what happens when you die.”

If you have a defined contribution pension, you can nominate whoever you want to receive your pension fund when you die, and this will be taken into account.

But MAPS adds: “It is usually at the discretion of the provider or trustees managing the pension who gets paid.”

What is the difference between defined contribution and defined benefit pensions?

Defined contribution Pensions take contributions from both the employer and employee and invest them to provide a reserve of money at retirement.

Unless you work in the public sector, they have now mostly replaced the more generous gold-plated ones. defined benefit – or final salary – pensions, which provide a guaranteed income after retirement until death.

Defined contribution pensions are stingier, with savers bearing the investment risk rather than employers.

This is Money pensions columnist Steve Webb responded to a question from someone whose ex-husband wanted them to inherit his pension because they were his full-time carer, but after his death the plan was refused.

“The way things work in practice does not always match the wishes of the person who has died,” wrote Webb, a former pensions minister and now a partner at LCP.

He explained what happens with current pensions, which are decided according to the rules of the plan, and lump sums, where discretion can be used.

“Trustees can sometimes face a difficult choice between different people who have an opposing right to receive the lump sum, and sometimes even split the lump sum to reflect this,” he said.

Webb added that the most important thing to do is make sure the “expressions of wishes” forms reflect your most recent preferences and check the pension plan’s rules.

His other message is not to forget the pensions you have accumulated in the past in addition to the current ones.

MAPS, which surveyed 2,500 UK adults with a pension, found that 41 per cent believed it would go to their nominated beneficiary in the event of their death.

About 23 percent thought their pension would automatically pass to their next of kin, 11 percent didn’t know, another 11 percent believed the government would receive it, 8 percent thought their employer would keep it, and 7 percent that your pension provider would get it.

Meanwhile, 20 per cent did not know who they had nominated to receive any of their pensions, 47 per cent knew for all, 11 per cent knew for “most” and 10 per cent knew for “some”.

About three-quarters of respondents said their pension plans have up-to-date details.

Regarding who inherits your pension if you die, MAPS head of pensions policy Jackie Spencer said: “It’s a difficult issue to think about and no-one expects the worst to happen to them, but it’s absolutely crucial that we plan accordingly. case it happens.” .

‘People come and go in our lives and if you have someone you no longer love as a beneficiary, they could end up benefiting at the expense of the loved ones you’ve left behind. These results suggest that millions of people are at risk.

‘We are asking everyone to do one thing and check that they have the right beneficiary for each and every pension they have. This can be done by contacting your pension provider by phone or online and will make all the difference if you die prematurely.’

What happens to your state pension?

One of the most frequently asked questions our columnist Steve Webb receives is how much state pension a widowed couple can expect to receive.

There is no clear answer, as it depends on when the surviving partner reaches or has passed state pension age and their spouse’s date of birth and their social security record.

What you could inherit, if anything, is much less generous if you reached or are yet to reach state pension age after April 2016.

Find out here if you or your spouse or common-law partner could inherit any state pension.

The Government has a tool where you can enter your data to check it If you can inherit the state pension here.

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