New Model Adviser - For Professional Investors

Register free for our breaking news email alerts with analysis and cutting edge commentary from our award winning team. Registration only takes a minute.

Pensions Doctor: Back-up expression of wishes offers inheritance plan B

Pensions Doctor: Back-up expression of wishes offers inheritance plan B

By making her specific wishes clear, Bryony can ensure her named beneficiaries receive death benefits in a way that best suits them, not the pension administrator, whatever the circumstances.


Bryony is 76 and divorced. Her son David is 46 and self-employed. Bryony’s grandchildren, Hannah and Tom, are both about to finish university.

The expression of wishes on Bryony’s Sipp currently leaves 100% of the fund to David. David’s business has been struggling for a number of years, but is now on the brink of a turnaround. If it becomes a success, David will not need the money. In this case, both he and Bryony would like some of the money from her Sipp to go to Hannah and Tom. The most tax efficient and flexible option for all three would most likely be beneficiaries’ drawdown.

Bryony has no concerns about leaving money directly to Hannah and Tom. They are young, but Bryony is confident both would use any inheritance sensibly. Bryony’s main concern is what would happen if her family’s circumstances changed and she was unable to update her expression of wishes before she died. Bryony will aim to keep her expression of wishes up to date. But she does not want to be caught out by unforeseen circumstances.


Bryony’s scheme administrator has ultimate discretion over who to pay the death benefits from her Sipp. However, it will most likely follow the expression of wishes first.

Bryony’s current expression of wishes will not achieve her aims if David was to turn down some or all of the benefits. If this happened, the administrator would choose different beneficiaries for the benefits not taken by David.

Doubtful drawdown

As Bryony has no other family and her adviser will have a record of their conversation, the administrator will most likely choose Hannah and Tom as beneficiaries in this situation. But Hannah and Tom would not be able to use beneficiaries’ drawdown.

Where a scheme administrator is choosing beneficiaries, it can only offer drawdown if:

  • The deceased member had no surviving dependants.
  • There were no individuals or charities named on the deceased’s expression of wishes.

David is named on Bryony’s expression of wishes, so the administrator would not be able to offer drawdown to Hannah and Tom.

Bryony can avoid this potential problem by also naming Hannah and Tom on her expression of wishes. Any beneficiary named on an expression of wishes can be offered drawdown.

But Bryony’s main concern is that naming all three would mean the administrator would want to pay benefits to all three, even if David was in greater need of the money.

Secure structure

Carefully structuring her expression of wishes can remove any ambiguity. She can name Hannah and Tom as alternative beneficiaries, effectively making a back-up expression of wishes.

She can ask the scheme administrator to only consider paying benefits to Hannah and Tom if David turns down some or all of the benefits, or if he dies before Bryony.

Some pension scheme administrators will have expressions of wishes forms that cater for this structure. Most will also accept signed, written expressions of wishes. This is as long as it does not ask the administrator to do anything that is not possible within the legislation. So Bryony could also write a letter to this effect.

Updating her expression of wishes in this way will give Bryony peace of mind. If anything happens to her before she is able to update her expression of wishes, her family can still benefit in the way that best suits them.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Comment & analysis