Your marital status has an influence on your pension plan
Important things to remember
- Make sure to provide mutual financial security
- Make sure your money ends up with the right people on your death
- What happens to your pension if you each go your separate ways?
How are you and your partner protected financially?
In most partner relationships, two incomes are needed to make ends meet. Can you afford to pay your fixed expenses if you become too ill to work? And can your partner stay in your home if you die?
If not, you could consider increasing your insurance cover if you become too ill to work or die. This gives you and your immediate family a stronger financial safety net.
What should you remember if you get a new partner?
It is a good idea for you to review the insurance cover under your pension scheme together. This will allow you to gain an overview of whether you have protected yourself, each other and your children if something happens to one of you.
If you get married, your partner will become
your next of kinWho are your next of kin?
If your pension scheme was set up in 2008 or later, your next of kin are (in order):
- Spouse or civil partner
- Cohabiting partner who has either lived with you for two years or with whom you have children
- Heirs apparent, i.e. children, grandchildren, etc.
- Heirs under a will
- Other heirs
If your scheme was set up in 2007 or earlier, your cohabiting partner is not eligible. In other words, your children/heirs will receive payouts if you do not have a spouse/civil partner.
If you want people other than your next of kin to receive the money, you can add one or more special beneficiaries on your pension scheme.
You are always entitled to give preferential treatment to your (divorced) spouse, your issue (children, grandchildren, etc.), stepchildren and your cohabiting partner. You can include who you want to on certain types of insurance. You can set up beneficiaries by writing to AP Pension.
If you have included a named beneficiary, you can change your decision at a later date if you no longer think that the beneficiary should receive a payout. You can write to AP Pension in this case too.
and will receive any payouts from your pension scheme on your death. If your pension scheme was set up in 2008 or later, your partner will be your next of kin if you have lived together for two years – even if you are not married. If you wish to change this, you must add a special beneficiary to your scheme. Contact AP Pension to do this.
What do you need to remember if you are divorced?
After a divorce, you can consider reducing your death insurance, because your children generally do not take over your obligations – such as a home loan. On the other hand, it is a good idea to have a high level of cover in case you become too ill to work, so that you can make your budget work without your normal salary.
When you go your separate ways, you each take a reasonable part of your pension savings with you. You only share pensions if you have made a prenuptial agreement. What constitutes a reasonable part is based on estimates and your financial situation, which allows for compensation.
Remember that if you have entered your former spouse as a beneficiary on your pension scheme, you must change this if you do not want them to receive payouts on your death.