Pension Sharing Order

Why a Will is Important for both Yourself and your Pension savings



Posted on: 20th November 2018

According to the latest survey by Will Aid, just over half of UK adults (53 per cent) do not have a will. For many individuals, it is something that doesn’t cross their minds. For others, they simply haven’t ticked it off their list yet. Writing a Will is hardly a thrilling experience. However, you should make yourself aware of why a Will is important.

Why a Will is Important

Take a moment to think about the practical and financial benefits it can bring to your loved ones. Putting a Will together can be an extremely easy process. Once it’s done, you can go about your life until it’s time to give it a review. Here, we explain why a Will is important for both yourself and your pension savings.

Peace of Mind

The first step is to sort out your finances, property and belongings. All of these make up your “estate”. It is important to make a will sooner rather than later. By doing so, you can keep it up to date as your life events develop. This means that you will receive peace of mind that the right people, or charities, will benefit as you wish.

It may seem cheaper to take the DIY approach to your will, but this is rarely the case. In fact, by taking matters into your own hands, you could miss a step, or create steps that aren’t necessary. This will end up costing your family more in the long-run. We highly recommend that you speak to an IFA to make sure that you have everything in order. The Money Advice service also has plenty of useful information for writing a will. However, please be aware that there are different legal rules across the UK.

Anything Could Happen

Big events such as having children, getting married, divorce and more can make a difference. As we are seeing more individuals contesting inheritance in court, it is more important than ever to keep your will up to date.

Making Life Easier for your Loved Ones

If you do not have a will, your estate will be dealt with under what is known as intestacy rules. In other words, the law will determine who inherits what when you die. This means that your money may not go to the people you would want to receive it. It may also take longer, meaning there will be more legal costs for the loved ones you leave behind. Having a will ensures that everything is done as you wish.

Surprisingly, your Will does not Cover your Pension Savings

Not everyone understands that a will does not normally cover what should happen to your pension savings. You will find that modern, flexible pension pots can be passed down to anyone you choose. In some circumstances, it’s tax-free. However, this choice must be actively made through a pension beneficiary nomination form. This is something you must fill out with your pension provider.

Remember to keep it up to date if your personal circumstances change. Doing so will ensure that those pension savings are passed onto the right people or the right charities.

Ideal for Cohabiting

Are you and your partner not married, but instead, are cohabiting? If so, you should be aware that unmarried partners do not have an instant right to an inheritance. This is not known by many individuals, so it can be quite a shock when they realise too late. Having a will can ensure that those who are not married are taken care of.

Your Children

If you have younger children, a will is extremely important. Writing a will enables you to name the guardians who can care for them. It will also allow you to set up trusts, which means you can financially support their future.

Making your Money work as Hard as Possible for your Loved Ones

Do you own a property, have pension investments or are building up savings in bank accounts and ISAs? If so, you will likely want as much of it as possible to hand to the people and causes you care for the most. However, you may have more complicated circumstances or many assets to bear in mind. If so, it may be work turning to an independent financial adviser. They can assist in making sure your will is right for your intentions. They can also advise on any tax implications in the most effective way.

Tax Benefits from a Charitable Legacy

You will find that many charities rely on financial legacies. If this is something that is important to you, it is worth knowing that it is also tax efficient. Again, we highly recommend that you seek independent financial advice before you make a decision. This way, you will have peace of mind that your wishes are carried out.

Will Aid

Every November, Will Aid encourages solicitors to waive their basic will writing fees. This is more suited for those with simpler finances. They instead, invite people to make a voluntary donation to a charity. If you have a will or think that it’s time to draw one up, it’s important that you do so with an adviser.

Talk to Haven IFA

When you save for your financial future, it doesn’t just mean your retirement. What you leave behind is just as important. Here at Haven IFA, we aim to put you on the right savings path to secure a financial future for yourself, as well as your loved ones. To learn more about our services, get in touch to speak to one of our advisers.