Pensions After Death: State, Workplace & Private Pensions

State pension inheritance

You may be able to inherit extra State Pension from your late spouse or civil partner, provided your marriage or civil partnership began before 6 April 2016. If they reached State Pension age before 6 April 2016, you may inherit part of their Additional State Pension (SERPS or State Second Pension). If they reached State Pension age on or after that date, what you can inherit is narrower: half of any protected payment they had. Royal London put the average inherited SERPS payment at around £3,377 a year in 2023-24, and found that more than 17,000 people boosted their State Pension by over £10,000 that year through the inheritance rules. Contact the Pension Service on 0800 731 0469 to check what you may be entitled to.

Bereavement Support Payment

If your partner paid enough National Insurance contributions, you may be eligible for Bereavement Support Payment. This is a tax-free lump sum of £2,500 or £3,500 (the higher rate if you have dependent children), followed by up to 18 monthly payments of £100 or £350. When you claim changes what you get: within 3 months you receive the lump sum and all 18 monthly payments; between 3 and 12 months you keep the lump sum but lose some monthly payments; after 12 months the lump sum is lost altogether, though some monthly payments remain claimable up to 21 months; after 21 months you usually cannot claim at all. See our full guide for eligibility details and how to apply.

Workplace pension death benefits

Most workplace pensions pay a death benefit, which could be a lump sum (typically 2 to 4 times their annual salary), a dependant's pension paid to a surviving spouse or partner, or both. Contact their employer's HR department or the pension scheme administrator. They will send you a claim form and explain what benefits are available. These payments are often made at the pension trustees' discretion, so they are usually paid outside the estate and are free from inheritance tax.

Death in service benefit

Death in service is a separate benefit from the pension, provided by the employer as part of the employee benefits package. It pays a lump sum (often 2 to 4 times salary, sometimes more) to the person they nominated, or to their next of kin. Check the employee handbook, benefits portal, or contact HR directly. This benefit only applies if they were still employed by the company. If they had left the job, the death in service benefit no longer applies, though pension death benefits may still be available.

Private and personal pensions

What happens to a private pension depends on the type of scheme. For defined contribution pensions (where they had built up a pot of money), the pension provider pays the pot to the nominated beneficiary or, if no nomination was made, to whoever they consider appropriate. For defined benefit pensions (salary-related, final salary), the scheme may pay a dependant's pension to a surviving spouse, civil partner, or qualifying partner. Check with the pension provider for the specific scheme rules.

The Pension Tracing Service

People often lose track of pensions from previous employers, particularly if they changed jobs frequently. The Pension Tracing Service is a free government tool that helps you search for lost or forgotten pensions. Visit gov.uk/find-pension-contact-details or call 0800 731 0193. You will need the name of their former employer or pension provider. The service gives you contact details for the scheme so you can enquire about any benefits.

NHS pension death benefits

NHS pensions are administered by NHS Business Services Authority (NHSBSA). Death benefits depend on when the member joined and their scheme (1995, 2008, or 2015 sections). Benefits typically include a lump sum (usually 2 times pensionable pay for active members), a surviving partner's pension, and children's pensions. Contact NHSBSA directly on 0300 330 1346 or visit nhsbsa.nhs.uk/member-hub/bereavement. Processing can take 8 to 12 weeks.

Teachers' and civil service pensions

The Teachers' Pension Scheme (teacherspensions.co.uk) and Civil Service Pension Scheme (civilservicepensionscheme.org.uk) both provide death benefits. These typically include a lump sum and a dependant's pension. Contact the relevant scheme administrator when you are able to. You will need their pension reference number, which should be on any pension correspondence.

Tax on inherited pensions

The tax treatment depends on how old they were when they died. If they were under 75, pension benefits (lump sum or drawdown) are normally paid tax-free to the beneficiary. If they were 75 or over, any pension benefits are taxed as income at the beneficiary's marginal rate. These rules apply to defined contribution pensions. Defined benefit dependant's pensions are always taxed as income, whatever their age. Pension death benefits paid at the trustees' discretion are normally outside the estate for inheritance tax.

What happens to a pension when someone dies?

It depends on the type of pension. Defined contribution pensions (money purchase) are usually paid to the nominated beneficiary as a lump sum or drawdown. Defined benefit pensions (final salary) may provide a dependant's pension to a surviving spouse or partner. State pension entitlement may be partially inherited. In all cases, contact the pension provider or scheme administrator to find out what specific benefits are available.

Can I inherit my spouse's state pension?

It depends on when they reached State Pension age, and your marriage or civil partnership must have begun before 6 April 2016. If they reached State Pension age before 6 April 2016, you may inherit part of their Additional State Pension (SERPS or State Second Pension). If they reached it on or after that date, you can inherit half of any protected payment they had. You cannot inherit the main new State Pension itself, but if your own is low you may be able to use your late partner's National Insurance record to boost it. Contact the Pension Service on 0800 731 0469 to check your specific entitlement.

What is death in service benefit?

Death in service is an employer benefit that pays a lump sum to the family of an employee who dies while employed by the company. The amount is usually 2 to 4 times the employee's annual salary, though some employers offer more. It is paid to the person nominated by the employee (or their next of kin if no nomination was made). It is separate from the workplace pension and only applies if the person was still employed at the time of death.

How do I trace a lost pension?

Use the free government Pension Tracing Service at gov.uk/find-pension-contact-details or call 0800 731 0193. You will need the name of the former employer or pension provider. The service searches a database of over 200,000 pension schemes and gives you the contact details so you can enquire about benefits. Also look for old pension statements in their paperwork, as these will have scheme names and reference numbers.

Are inherited pensions taxable?

If they were under 75, defined contribution pension benefits (lump sum or drawdown) are normally paid tax-free. If they were 75 or over, benefits are taxed as income at the beneficiary's marginal tax rate. Defined benefit dependant's pensions are always taxed as income regardless of age. Most pension death benefits are outside the estate for inheritance tax purposes because they are paid at the trustees' discretion.

How do I claim workplace pension death benefits?

Contact their employer's HR department or the pension scheme administrator. They will confirm what benefits are available and send the necessary claim forms. You will typically need to provide a death certificate, proof of your identity, and proof of your relationship to them. Processing times vary, but most schemes aim to pay within 4 to 8 weeks of receiving a completed claim.