Pensions-taxtreatmentondeath

What happens to a pension when the holder dies depends on the type of scheme, the member's age at death, and who is nominated to receive the benefits. Defined contribution pots can often be passed to chosen beneficiaries relatively flexibly, while defined benefit schemes typically pay according to fixed rules, sometimes including a spouse's or dependant's pension.

Pension death benefits generally sit outside the member's estate for inheritance tax purposes, which makes pensions a valuable part of estate planning, though the tax treatment of any income drawn by beneficiaries can vary. Keeping expression of wish or nomination forms up to date is essential, and we can help review your arrangements as part of wider succession planning.