What happens to your pension when you die?

Many of us are guilty of throwing those annual pension statements in the bin and promising ourselves that we will sort out our pension at ‘some point’. Unless you’re nearing retirement age, you may not know how much you will get or even who your workplace pension provider is, let alone know what happens to your pension when you die.

Depending on the type of pension scheme you have, your pension may provide financial support to your loved ones after you die.

What happens to my pension when I die?

State pensions

If you die after retirement age and you have started receiving payments, generally, payments will simply stop. It is not unusual for an overpayment of state pension to be made after a person has died which the Executor will need to refund from the estate. Your spouse or civil partner may receive additional state pension payments, depending on the amount of National Insurance contributions you both made and when you both reached or will reach, the state pension age (currently 66 years old in the UK).

You can find out if your other half will inherit your state pension using this Government tool.

Company or private pensions

After you pass away, your loved ones may be entitled to payments from your workplace pension, but this depends on your provider’s rules and whether they are a named Beneficiary. A claim form will usually be sent to the person dealing with your estate when the pension company is notified that you have died.

How do I nominate a Beneficiary to receive my pension?

You can usually nominate a Beneficiary to receive any pension benefits due through your pension by completing an Expression of Wish form or a Nomination Form (your pension provider can give you this).

An Expression of Wish form and a Will are separate things. It is important to remember that an Expression of Wish form is not legally binding, whereas a Will is.

Top tip: check your details are up to date!

If you haven’t updated your details with your pension provider recently, it is a good idea to check your nominated Beneficiary is who you want it to be, especially if you have separated or divorced since you took out the pension.

Get advice from an IFA

We would always recommend taking specialist advice from a qualified Independent Financial Advisor (IFA) who can review your pension scheme and assist with Inheritance Tax planning.

Contact our Wills and estate planning solicitors in Bristol

For straightforward advice on preparing for the future, our expert estate planning solicitors are here to help. Our friendly team can advise you on writing or updating your Will, setting up a Lasting Power of Attorney and making your wishes clear to your loved ones.

To get in touch, call us on 0117 325 2929 or fill out our online form.