Death and pensions

What happens to your pension when you die?

If you’ve haven’t taken all your pension savings yet

If you die before you've taken everything from your pension pot, its value will normally be paid to your beneficiaries.

The beneficiary could be a dependant or a nominee.

A dependant is someone who is financially dependent on you such as your spouse, civil partner or long-term unmarried partner. It could cover a child under the age of 23. There is more detail on how you nominate a beneficiary below.

A nominee can be any other person, even if they are not your dependant and can also be a charity.

If you die before age 75, any benefits paid to a beneficiary will normally be tax-free. If you die after age 75, these benefits will be subject to income tax.

There will normally be no inheritance tax to pay.

Tax treatment depends on individual circumstances and may be subject to change.

If you’ve pension savings left in flexi-access drawdown

On your death, your beneficiary can choose to take the remaining value as a lump sum or use it to buy an annuity. They may also be able to continue with flexi-access drawdown.

The nominated beneficiary may be able to pass on any unused drawdown funds on their death to their own nominated beneficiary, known as a successor.


If you have an annuity

If you chose an annuity that has a guaranteed period, the income payments from it will be paid until the end of that period, even if you die before then.

If you bought an annuity which provides for a dependant or nominee, they'll receive their own  income payments from it if they are still alive after you have died. This will be paid for the rest of their life. 

In all other cases, no further income payments will be paid from an annuity after your death.

Some pension providers may allow you to protect up to 100% of the amount used to buy the annuity as an alternative to a guaranteed period. This is called value protection and may pay a lump sum on your death or the later death of a dependant. 

Read more about passing on your pension and tax

How do you nominate a beneficiary?

You can let your pension provider know who you would like to leave your pension savings to in the event of your death (the nominee). You can do this by completing a nomination or expression of wish form.

While this is not binding, it’s taken into account when paying death benefits. As we use our discretion to decide who is to receive the benefits, they do not normally form part of your estate, which means they are not normally subject to Inheritance Tax. It’s important to keep this information up to date as your wishes and circumstances change.

Contact your provider and ask for a nomination or expression of wish form to nominate who should benefit from your pension.

Even if you've already completed a form, it’s important to regularly review it to make sure it’s still in line with your wishes, especially if there have been changes to your circumstances. You can submit an updated nomination at any time. 


It's important to know what happens to your pension savings after you've gone. This video explains the tax implications and how it's paid to beneficiaries.

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Got a question?

If you need to ask us a question about pensions or retirement, then get in touch. There are lots of ways to contact us.

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