What happens to your pension when you die?
Your will does not control your pension. A form most people signed once and forgot does. Here is who gets what, and what the tax looks like.
A defined contribution pension usually passes to whoever you nominated. It sits outside your estate for inheritance tax until 5 April 2027; from 6 April 2027 most unused pension funds and death benefits come within inheritance tax. If you die before 75 it is generally paid tax free. From 75 the person receiving it pays income tax. Defined benefit schemes instead pay a survivor's pension under their own rules.
Defined contribution pots usually pass on
A modern pension pot does not die with you. It normally passes to whoever you have nominated. It sits outside your estate for inheritance tax until 5 April 2027; from 6 April 2027 most unused pension funds and death benefits come within inheritance tax.
The age you die at decides the tax on the person receiving it.
| You die | Tax for the person inheriting | How they can take it |
|---|---|---|
| Before 75 | Normally tax free | Lump sum, drawdown or an annuity |
| At 75 or after | Taxed as their income | Lump sum, drawdown or an annuity |
This covers defined contribution pensions. Defined benefit schemes follow their own rules.
The form that decides everything
The scheme trustees decide who receives the money. They follow your expression of wish form if there is one. If there is not, they decide without you.
Update it after a marriage, a divorce, a birth or a death. It takes ten minutes and there is no charge.
Final salary schemes work differently
Defined benefit schemes usually pay a survivor's pension, commonly half the member's amount, to a spouse or civil partner for life.
Unmarried partners are not always covered. Some schemes require you to nominate them and some will not pay them at all. Check the rules rather than assuming.
Children under a set age often receive a pension too. It usually stops when they finish full-time education.
What the drop actually looks like
| Household income now | After one death | The gap |
|---|---|---|
| Two full State Pensions | One, about £12,547.60 a year (full new State Pension, 2026-27) (full new State Pension, 2026-27) | Roughly half the income |
| State Pension plus a £14,000 scheme pension | State Pension plus about £7,000 | About £7,000 a year |
| Two salaries of £32,000 | One salary and any death benefit | About £32,000 a year |
Illustrative. Fixed costs such as council tax and energy barely fall when a household loses a person, which is what makes the gap bite.
Want this checked against your own situation?
Send us the figures and we will tell you what they mean. If it is not ours to advise on, we will say who should.
Ask us a questionPrefer WhatsApp? Message us there. We are open Monday to Saturday, 9am to 8pm.
We advise on and arrange life cover, critical illness cover and income protection ourselves. There is no fee to you for our advice. If you take out a policy, the insurer may pay us a commission.
The State Pension mostly stops
Under the new State Pension you cannot usually inherit your partner's full amount. You may inherit part of a protected payment built up before 2016.
For a couple relying on two State Pensions, that is a large drop in household income at the worst possible time.
What to do about the gap
If the household would struggle on one income, that is a protection question rather than a pension one. Life cover pays out on death and is one of the things we advise on and arrange ourselves.
- Check every pension has a current expression of wish form
- Find out whether your scheme pays an unmarried partner
- Work out the household income if either of you died tomorrow
- Consider whether life cover fills the gap more cheaply
- Put existing policies in trust so they pay out faster
Where you stand
- You have married, divorced or had a child since you joined a scheme
- You live with a partner you are not married to
- You have pots with employers you left years ago
- You have never seen an expression of wish form
- Your estate is near the inheritance tax threshold
- A beneficiary receives means-tested benefits
- You want to leave a pension to someone other than your spouse
- Your scheme rules exclude unmarried partners
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Questions people actually ask
Who gets my pension when I die?
Is an inherited pension taxed?
Does my pension count for inheritance tax?
What happens to my State Pension when I die?
Can my partner inherit if we are not married?
How do I check broadband speed at a property?
Where to go next
Figures checked on 1 September 2026 and correct for the 2026/27 tax year. Rates change, so check the source before you act on a number.
Would the household cope on one income?
That is a protection question, and it is one we can answer and act on ourselves. It usually costs less than people expect.
Start a conversationPrefer WhatsApp? Message us there. We are open Monday to Saturday, 9am to 8pm.
We advise on and arrange life cover, critical illness cover and income protection ourselves. There is no fee to you for our advice. If you take out a policy, the insurer may pay us a commission.