A recent case has shown that you must be careful as to how you nominate your pension's beneficiaries.

The case revolved around a Small Self Administered Scheme (SSAS). This type of scheme is usually used by small companies for its managers, owners and directors. Effectively it's a company pension scheme for small companies.

In this case, there was one remaining member because the company, and thus the pension scheme, was closing down. The member, being the last beneficiary of the scheme, paid the pension funds to himself. He did this because, under Saunders v Vautier, he was entitled to wind up the scheme. HMRC didn't see it the same way and said that in the pension deed there were other "potential beneficiaries". While it was very unlikely that any of these beneficiaries would materialise (because they were children of children who were not even born yet!), they might at some point in the future and so the scheme should not be closed. The scheme administrator then had a very big bill to pay.

It is important that you keep beneficiaries up to date on all documents, but beneficiaries on pensions are often forgotten. We suggest that you take some time to revisit your pensions to make sure the right people get the right money.