Pension death benefits: what happens when someone dies

Pension death benefits are often something you're trying to understand at a genuinely difficult time, whether you've been recently bereaved or you're simply making sure your own affairs are in order. Two things decide what happens: the type of pension scheme involved, and the member's age at death.

The table below shows the before-75 and after-75 tax position at a glance. The detail behind each row, including the difference between defined contribution and defined benefit schemes, is covered further down this guide.

The 2-year rule matters more than most people realise. Tax-free treatment on a lump sum generally depends on the scheme administrator being notified, and paying out, within two years of the member's death. If that window is missed, whether because of delays notifying the provider or the provider taking too long to act, the payment can lose its tax-free treatment and become taxable instead, even if death occurred before age 75.

This is a strong reason to make sure your beneficiaries, or your executor, know which pension providers to contact and how to reach them, rather than leaving it to be worked out after the event. See gov.uk's guidance on tax on a pension you inherit for the current allowances and thresholds, since these are reviewed periodically.

The type of pension scheme is the first thing that determines what's paid out when someone dies. If you're not sure which type of pension you or a loved one has, our guide to types of pension in the UK explains the difference in more detail.

Defined contribution (money purchase) pensions

With a defined contribution pension, the pot itself passes to whoever the member named on their Expression of Wish form, or, without a valid nomination, at the scheme administrator's discretion. Beneficiaries can usually choose a lump sum, income drawdown, or an annuity, subject to the age-75 tax treatment covered above.

Most defined contribution pensions sit outside the member's estate for now, which is why the nomination, not the will, generally controls who receives it. That's covered in more detail in the Expression of Wish section below.

Defined benefit (final salary) pensions

With a defined benefit pension, there's no pot to inherit. Instead, the scheme rules set out who qualifies, typically a spouse, civil partner, or dependent child, and what percentage of the member's pension they receive, often for life or until a dependent child reaches a set age. A tax-free lump sum may also be payable if death occurs before the pension was drawn, or within a guarantee period after it started.

Scheme rules vary significantly between employers, so the specific scheme booklet, or a call to the scheme administrator, is the definitive source for what applies in any individual case.

Unlike a will, most defined contribution pensions are not automatically inherited by next of kin or governed by the terms of a will. Do private pensions pass to next of kin? Not automatically, no. The scheme trustees or administrator have the final say, guided by an Expression of Wish, sometimes called a nomination or beneficiary form, that the member completes with the provider.

Providers generally follow a clear, up-to-date Expression of Wish when deciding who receives death benefits, though it isn't usually a binding instruction in the way a will is. Can you pass your pension to your children? Yes, you can nominate children as beneficiaries, alongside or instead of a partner, and providers will usually take this into account.

Keeping this form current, especially after marriage, divorce, or having children, is one of the most useful things you can do. An out-of-date nomination can mean a pension is paid to the wrong person, delayed, or left to scheme discretion instead of your actual wishes. It's not a substitute for a will or wider estate planning.

When your husband, wife, or partner dies, do you get any of their pension? It depends on the type of pension and, if you're not married or in a civil partnership, whether you were nominated. There are two common routes.

If it was a defined benefit workplace or public sector pension, many schemes pay a spouse's or civil partner's pension, typically a set percentage of what the member was entitled to, for the rest of your life or until it's no longer payable under the scheme rules. If it was a defined contribution pension, you may inherit the remaining pot, but generally only if you were named on the Expression of Wish, and what you can draw from it, and whether tax is due, follows the age-75 rules covered above.

Unmarried, cohabiting partners are not automatically entitled to a share of a defined benefit pension unless the scheme specifically allows for a nominated dependant. This makes an up-to-date Expression of Wish especially important if you're living with a partner but aren't married or in a civil partnership.

Yes - the State Pension is a completely different product from a workplace or personal pension, and it's worth understanding the distinction so you're not left looking for a lump sum that doesn't exist. The State Pension is not a pot of money, so it can't be left as a lump sum, and there's no ongoing survivor's State Pension for most people under current rules.

Some people on the older, pre-2016 State Pension system may be able to inherit a limited additional amount based on their late spouse's or civil partner's National Insurance record. You can check your State Pension forecast on gov.uk, and see the current State Pension amount in our guide alongside your own entitlement. This is separate from the workplace and personal pension death benefits covered throughout the rest of this guide.

Most defined contribution pensions currently sit outside the member's estate for Inheritance Tax purposes, so no Inheritance Tax is usually due on the pension pot or lump sum death benefit itself. This is changing: from April 2027, confirmed government policy will bring most unused pension funds and death benefits within the Inheritance Tax estate calculation for the first time. For the confirmed detail, see the government's technical note on inheritance tax on pensions.

This page focuses on the mechanics of who gets paid, how, and the age-75 Income Tax split. For the full picture, including the April 2027 changes, worked examples, and how it interacts with the rest of your estate, see our guide to pension inheritance tax.

Any outstanding secured borrowing, such as a mortgage, is deducted from an estate's value before Inheritance Tax is calculated. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it, so it's worth weighing this up alongside any pension and Inheritance Tax planning rather than looking at it in isolation.

We compare a wide range of lenders and work with regulated advisors who can help you review your pension nominations, check the death benefit rules across multiple old pensions, and coordinate your pension planning with your will and wider estate plan. This is particularly useful if you're juggling several old workplace pensions and aren't sure what each one actually pays out on death - our guide to best pension providers in the UK can help you track older policies down.

Pension nominations work alongside, not instead of, a will. If you're not sure what happens without one, see what happens if you die without a will, and consider how your pension fits into your wider estate planning so nothing falls through the cracks. Whatever stage you're at, it's worth getting pension advice from a Financial Conduct Authority-regulated advisor, with access to expert advice and no pressure to proceed.

If you'd like a quick way to work out where you, or someone you're helping, might stand, run through the four questions below. Each links back to the relevant section of this guide for the full detail.