What Happens to Your Pension When You Die?
Who gets it usually depends on a form you filled in years ago, or never did.
A defined-contribution pot can normally be passed on. Who receives it is guided by your expression of wish form. The tax treatment depends on your age at death and the rules in force at the time.
The form that decides it
Most schemes ask you to complete an expression of wish, sometimes called a nomination. It tells the trustees who you want the money to go to. It is not legally binding, which is deliberate, but trustees normally follow it. If you have never filled one in, or filled it in before a divorce or a new relationship, that is the single most valuable thing to fix today.
Why your will usually does not control it
Pension death benefits are typically held under trust and sit outside your estate. That is why they can often pass without waiting for probate. Most unused pension funds and death benefits will be brought into the scope of Inheritance Tax from 6 April 2027. It also means your will does not direct them, so a carefully drafted will and an out-of-date nomination form can point in opposite directions.
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Defined contribution: what can pass on
Whatever is left in the pot can usually be paid out, either as a lump sum or as continuing income to a beneficiary. The tax treatment depends on your age at death and on the rules at the time, and this is an area where the rules have changed more than once. Check the current position rather than relying on what was true a few years ago.
Defined benefit: what a scheme pays
Final-salary schemes usually pay a reduced pension to a spouse or civil partner, and sometimes to dependent children. What they do not usually do is hand over a capital sum. Two people with similar-sized pensions can leave very different things behind depending on which type they hold.
What to do this week
List every pension you hold. For each one, find out whether a nomination exists and who is named. Update anything out of date. It takes an afternoon, it costs nothing, and it is the difference between money reaching the right person quickly and a long argument at the worst possible time.
A worked example: The form nobody updated
Peter completed an expression of wish in 2004 naming his then wife. They divorced in 2013 and he remarried in 2016. He never revisited the form.\nWhen he dies the trustees are not bound by that nomination, but it is the clearest statement of his wishes they hold. His widow has to make a case, and the process takes far longer and costs far more in stress than the ten minutes updating a form would have. This is the single cheapest thing to fix on this page.
Figures are illustrative and rounded, used to show how the rule works. Your own numbers will differ.
A second example: Two pensions, two very different outcomes
Margaret holds a defined-contribution pot of £180,000 and a final-salary pension paying £9,000 a year.\nOn her death the pot can pass to her nominated beneficiary as a lump sum or as income. The final-salary pension pays a reduced amount to her husband for his lifetime and then stops; there is no capital sum. Two pensions of broadly similar worth to her, leaving completely different things behind.
At a glance
| Pension type | What usually passes on |
|---|---|
| Defined contribution | The remaining pot, as a lump sum or income |
| Final salary | A reduced pension for a spouse or civil partner, sometimes children |
| Annuity without options | Usually nothing |
| Annuity with a guarantee or spouse's benefit | Continuing payments |
Common mistakes
- Never completing an expression of wish form.
- Leaving an old form naming an ex-partner.
- Assuming your will directs the pension. It usually does not.
- Relying on tax guidance that has since changed.
We are introducers, not pension advisers. We put you in front of someone who is, and it costs you nothing.
What to do next, in order
- List every pension you hold.
- For each, find out whether a nomination exists and who is named.
- Update anything out of date, especially after a divorce, marriage or new child.
- Tell whoever would need to find them where the list is kept.
Key terms, in plain English
- Expression of wish
- A form telling your pension scheme who you would like to receive the money on your death. Not legally binding, but trustees normally follow it.
- Beneficiary
- The person or people who receive your pension benefits on your death.
- Dependant's pension
- Continuing income paid to a spouse, civil partner or dependant by a defined-benefit scheme.
- Defined contribution
- A pension built from contributions and investment growth. What you end up with depends on what went in and how it performed. Most modern workplace and personal pensions are this type.
- Defined benefit
- A pension that promises an income for life based on your salary and service, rather than a pot of money. Final-salary and career-average public-sector schemes are defined benefit.
Who this affects most
This affects everyone with a pension, and most urgently anyone who has divorced, remarried, had children or been widowed since they last completed a nomination form. It is the cheapest and most commonly neglected piece of financial housekeeping there is.
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Common questions
Who gets my pension when I die?
For most defined-contribution pensions, whoever the trustees decide, guided by your expression of wish form. If that form is missing or out of date, the money may not go where you expect.
Does my will cover my pension?
Usually not. Pension death benefits are typically held under trust and sit outside your estate, which is why they can often pass without waiting for probate. Most unused pension funds and death benefits will be brought into the scope of Inheritance Tax from 6 April 2027.
What is an expression of wish?
A form telling the scheme who you would like to receive your pension. It is not legally binding, but trustees normally follow it. Reviewing it after a divorce, marriage or new child is essential.
Is a pension taxed when it passes on?
It depends on your age at death and the rules in force at the time. This area has changed more than once, so check the current position rather than relying on older guidance.
What does a final-salary scheme pay out?
Usually a reduced pension to a spouse or civil partner, and sometimes to dependent children, rather than a capital sum. Two people with similar pensions can leave very different things behind.
Can I name more than one person?
Yes, and you can specify proportions. You can also name a trust, though that has consequences worth taking advice on.
What if I never completed a form?
Trustees will decide based on your circumstances, usually favouring a spouse or financial dependants. It takes longer and the outcome is less certain.
Do unmarried partners get anything?
They can, but it is far less automatic. An up-to-date nomination form matters more for unmarried couples than for anyone else.
Where to check the official figures
Pension figures change every tax year. These are the free, official sources. Check the current number before you act on anything here.
- Check your State Pension forecast, GOV.UK
- Check your National Insurance record, GOV.UK
- Pension Tracing Service, GOV.UK
- MoneyHelper, pensions and retirement
- The FCA Register, check any firm
Where to go next
- Combining pensions: our main guide
- The NHS Pension Scheme explained
- The LGPS explained
- The Teachers’ Pension Scheme explained
The bottom line
Who receives your pension usually comes down to a form, and most people either never completed one or completed it before a divorce, a remarriage or a child. Your will does not normally control it, because pension benefits typically sit outside your estate. Defined-contribution pots can pass on as a lump sum or as income; final-salary schemes usually pay a reduced pension to a spouse and no capital at all. Spend an afternoon listing every pension you hold, checking who is named on each, and updating anything out of date. It costs nothing and it is the most neglected job in personal finance.
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We do not provide pension advice and we are not pension advisers. We introduce you to a carefully selected, FCA-regulated pension adviser. The introduction costs you nothing. If you go ahead, we may be paid a fee by that firm. Pension rules and figures change, and what is right depends on your own circumstances.