Bonus for the ex? Divorcees fail to update wills and pensions to include new partners
- Millions of divorcees have not completed the necessary ‘life admin’ to reflect their new relationships – leaving former spouses in line for £100,000 plus windfalls
- Over a quarter (29 per cent) of those previously married haven’t made separate provisions in their will for their new partner and just one in five (19 per cent) have updated their pension
- Just one in seven (14 per cent) divorced Brits have made provisions in their will for their children from a previous marriage
Former spouses could be set for a financial windfall as 60 per cent of divorcees, who are now in a new relationship, haven’t updated their personal finances. This is including the beneficiaries of their pension, death in service benefits, or wills, reveals new research from Direct Line Life Insurance1. More than a quarter (29 per cent) of those in a serious new relationship after previously being married haven’t updated their will to make provisions for their new partner and those that did make the update, took an average of two years to do so.
Less than one in five (19 per cent) of those previously married have updated their pension beneficiary after starting a new relationship, switching the recipient details to their new partner. Just one in ten (10 per cent) of those previously married have updated the recipient of their death in service benefit to reflect their new partner, meaning those on an average salary could leave their ex-spouse £110,4002. Even fewer have updated their life and health insurance policies (six and seven per cent respectively).
With ONS (Office for National Statistics) data showing that 42 per cent of marriages now result in divorce, and the number of divorced people in the UK rising by 9 per cent in the last decade, the analysis delves into the unwritten rules for the ‘life admin’ associated with starting new relationships. It also highlights Brits’ hesitation when it comes to updating personal and legal documents such as pensions, wills and insurance policies.
Just one in seven (14 per cent) previously married Brits have made provisions in their will for their children from previous marriages, risking the financial security of their children should the worst happen. Over two thirds of Brits (68 per cent) who are divorced and have children didn’t transfer any assets to them before remarrying or entering a new relationship. Although those that did gift money to the children from a previous relationship transferred an average of £28,000.
|Updated pension recipient (if they were to pass away) to reflect new relationship||19 per cent|
|Made provision in will for children of previous marriage/relationship||14 per cent|
|Updated death in service recipient to reflect new relationship||10 per cent|
|Placed money in trust for children of previous marriage/relationship||8 per cent|
|Updated health insurance to reflect new relationship||7 per cent|
|Update life insurance policy recipient (split it) to reflect new relationship||7 per cent|
|Made provision in will for partner from previous marriage/relationship||6 per cent|
|Updated life insurance policy (split it) to reflect new relationship||6 per cent|
|Placed money in trust for partner from previous marriage/ relationship||1 per cent|
|None of these||60 per cent|
Jane Morgan, Business Manager at Direct Line Life Insurance, commented: “Leaving past relationships behind and moving on is a time of mixed emotion. However, our research shows that many Brits are letting their financial administration slip behind when it comes to updating wills, pensions and policies. It can be easy to forget about things like death in service certificates and life insurance policies once they are taken out, but it’s important to keep these up to date. Having a previous partner as the beneficiary for a pension or death in service benefit could result in a costly and protracted legal battle and potentially leave a new partner financially vulnerable should the worst happen.”
“When life changes it’s important to review your cover. With more dependants or a new property, it could be time to take out additional protection. If you are in this situation, start by checking with your provider to see if your current policy could split, maintaining some protection for both parties.”
For more information on life insurance, please visit: https://www.directline.com/life-cover/family-financial-planning
Notes to Editors
1 Research conducted by Opinium among a nationally representative sample of 2,003 adults aged 18+ between 11th and 14th January 2019
2 Average salary source https://recruitmentbuzz.co.uk/average-wage-uk-salary-earning-age/ multiplied by average death in service terms https://www.moneysupermarket.com/life-insurance/death-in-service/
For further information please contact:
Head of News
Direct Line Group
Tel: 01651 831 668
Email: [email protected]
Citigate Dewe Rogerson
Tel: 0207 282 1023
Email: [email protected]
Started in 1985, Direct Line became the first UK insurance company to use the telephone as its main channel of communication. It provides motor, home, travel, pet and life insurance cover direct to customers by phone or on-line.
Direct Line life insurance policies are underwritten by Legal & General, registered office: One Coleman Street, London EC2R 5AA. Legal & General Assurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under number 117659. You can check the FCA register at www.fca.org.uk/register or call the FCA on 0800 111 6768. Legal & General will introduce customers who select the Funeral Benefit Option to Dignity Funeral Services, who are members of the National Association of Funeral Directors.
Customers can find out more about Direct Line products or get a quote by calling 0800 145 5522 or visiting www.directline.com/life-cover