Life insurance and pensions consolidator Phoenix Life found that a large proportion of insurance policy holders have forgotten to review the recipients of their policies since they were set up.

Close to 62% of life insurance policy holders fell into this category, 60% for critical illness cover, 65% for personal pensions, 61% for income protection and 65% for redundancy cover.

It means the policy holders could end up leaving money to the wrong people.

Pension challenges

Phoenix Life also found that 54% of a sample of 2,000 adults were not aware that their pension would go to the person who is named on their pension policy rather than their will.

Despite almost half of Britons holding a personal pension policy, Phoenix concluded that these policies are the least reviewed. This is especially true in the South West of England, where under 1 in 4 policyholders were found to have reviewed their pension plan.

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A lack of engagement with finances was underscored by another finding: almost 1 in 5 UK adults had personally benefited or had a family member who benefited from a policy they didn’t know existed.

More than half of Brits do not know about the policies their mother holds, 56% don’t know about their father’s and 73% don’t have this information about their siblings.

Don’t forget to check your policy

David Woollett, customer director at Phoenix Life, said: “Few people probably know that pensions don’t form part of the estate on death, which means unlike savings, property and investments, pensions aren’t covered by wills.

“Therefore, it’s incredibly important that you check all your financial policies regularly to assure your money will go to the people you want, if a claim is made.”

He added that people are likely to take out a number of different policies over their lifetimes – whether it’s a pension, life insurance, critical illness – so it is important that the beneficiaries are updated as circumstances change.

“Policyholders should inform their recipients about the policy, otherwise they won’t know to make a claim,” Woollett added.

‘Free Wills Month’ – an initiative which sees those aged 55 and over able to have their simple wills written or updated for free by solicitors – takes place in March.