The Family Law Company was consulted by a lady whose partner of 23 years had sadly died. They were unmarried and had no children together. Their income consisted primarily of her former partner’s occupational pension scheme. The relationship had been one of great commitment, in all respects as if they were married.
Her partner, anxious to ensure that she was provided for on his death, had written an “expression of wish” letter to the pension company and sent a similar letter to his relatives confirming his desire that she should receive a pension in the event of his death.
Following her partner’s death, she made application to the pension scheme, but after 18 months fruitlessly seeking a decision from the trustees, she consulted us. We were able to obtain for her a dependent’s pension at the rate of £18,000 per annum (one half of her former partner’s pension during his lifetime) together with arrears approaching £30,000.
The reason the process took so long is connected to her unmarried status. Even though her late partner had expressed his wishes to more than one person over an extended period, the matter still remained at the discretion of the trustees, based on her need and their determination of her status as a ‘dependent’. Contrast this with the position of a widower or widow, who is automatically entitled to any widow(er)’s benefits from his or her spouse’s pension.
So what is the position generally in relation to pension provision for an unmarried partner or dependents of an unmarried person on death?
If you are married you are entitled to a widower or widow’s pension on the death of a spouse. Cohabitees are not entitled to anything.
There are two main types – salary related (often called ‘final salary’, ‘defined benefit’ or ‘career average’) pensions or money purchase (‘defined contribution’) pensions. These pension schemes are generally a trust structure, which means they have specific rules laid out in a trust document and are managed by trustees. Some older style pensions and some government pensions have a different structure. Each pension trust may have slightly different rules, so where a deceased partner was a member of more than one scheme outcomes may differ between schemes when trustees exercise their discretion in relation to an unmarried partner applying for a pension. Areas where rules commonly differ include
- The definition of a “Dependent”. This is up to a trustee to decide; cohabitees may or may not be excluded under some older style pension schemes. Check the specifics of your/your unmarried partner’s scheme – “read the small print”.
- Whether children of an unmarried member will receive a pension on the death of the member and if so, up to what age (the maximum is generally 23, unless the child is disabled).
- Definition of a “child” (for example, if the pension member is not the child’s natural father or is not named as such on the child’s birth certificate but has always been responsible for the child’s upbringing). This too is generally at the discretion of the trustees.
Like occupational pensions, generally the death benefit is at the discretion of the trustees (even if the pension owner has left an “expression of wishes” giving guidance on how they want the pension left). However due to recent changes in pensions law, it is far easier to leave your private pension to your cohabiting partner on death.
The moral for unmarried couples
For the pension member – giving the pension trustees guidance on your wishes is important if you want your unmarried partner or other dependents to receive benefits on your death. Equally, it is important to change an expression of wish letter if this is no longer appropriate for whatever reason. After all, you will not be around to tell people what you meant to do
For the unmarried partner (if you are not a member of the pension scheme but rely on your partner’s pension for income) – it is important to have that conversation with your partner about the implications for you and your children in the event of their death.
For both – remember, often there are no others competing for provision from the pension trustees. Not making a nomination in those circumstances is potentially a waste of a valuable resource.
The Family Law Company has a team of lawyers specialising in the all aspect of the rights of unmarried couples. If you think we may be able to help you, please do get in touch with us to discuss.