What Happens to a Pension When Someone Dies? Probate and Tax Rules
When someone dies, working out what happens to their pension is often one of the hardest parts of sorting out their affairs. There may be an old workplace scheme, a private pension, the State Pension and perhaps an annuity, each with its own letters and its own rules. Many families assume all of it will be dealt with through probate, along with the house and the bank accounts.
Usually, it will not. Most private and workplace pensions do not go through probate. The pension scheme pays the money directly to the people the person nominated, and the will does not decide who gets it. There are exceptions, and for deaths on or after 6 April 2027 pensions will count towards inheritance tax, which brings them into the executor's work even though they still sit outside probate. This guide explains both, in plain terms.
This guide is for families and executors in England and Wales. The key points:
• Most private and workplace pensions are paid by the scheme to the people the person nominated, without waiting for probate.
• A will does not usually decide who receives a pension. The nomination form (often called an expression of wish) guides the scheme.
• A pension becomes part of the estate, and goes through probate, if the scheme pays it to the estate, for example because no one was nominated.
• The State Pension stops when someone dies. A husband, wife or civil partner may be able to inherit some extra State Pension.
• For deaths on or after 6 April 2027, most unused pension funds will count towards inheritance tax, and the executor must report and pay any tax due.
In this guide
• Do pensions go through probate?
• Is a pension part of the estate?
• What happens to each type of pension when someone dies?
• Does a will decide who gets a pension?
• Is an inherited pension taxed?
• Pensions and inheritance tax from 6 April 2027
• If you are the executor: what to do about pensions
Do pensions go through probate?
Most private and workplace pensions do not go through probate. The scheme decides who receives the money, guided by the nomination form the person filled in, and pays it directly to them. Because the money never becomes part of the estate, the family does not need to wait for a Grant of Probate before the scheme pays out.
This is because most pension schemes have discretion over who to pay. The people who run the scheme (the trustees or the provider) look at who the person nominated and at who depended on them, and then decide. MoneyHelper explains that pensions are not covered by any will, so you do not need to wait for probate.
A Grant of Probate is the court document that gives an executor the legal authority to deal with the estate. If you are not sure whether the rest of the estate will need one, our guide to when an estate needs probate explains the thresholds.
Is a pension part of the estate?
Usually not. A pension that the scheme pays at its own discretion is not part of the person's estate, so it is not shared out under the will or the intestacy rules. A pension becomes part of the estate when it has to be paid to the estate, and then it does go through probate with everything else.
That happens in a few situations:
• No one was nominated, and the scheme rules say the money goes to the estate. HMRC's guidance gives the example of death benefits that must be paid to the member's estate when no valid nomination was made. MoneyHelper says that with Nest, the government-backed workplace scheme, a pot will normally form part of the estate if no expression of wish form was completed.
• The scheme pays the money to the estate as of right. Some older personal pensions work this way, in particular retirement annuity contracts taken out before 6 April 1980.
• An annuity carried on paying after the death. If an annuity had a guarantee period and the remaining payments go to the estate, those payments form part of it.
Some schemes must follow the person's instructions rather than use their own discretion (a binding nomination, which MoneyHelper calls "direction"). The money is still paid to the person named, but HMRC treats it as part of the estate for inheritance tax.
If you are the executor, it is always worth asking each scheme in writing whether anything is payable to the estate. The answer decides whether that money goes through probate.
What happens to each type of pension when someone dies?
What happens depends on the type of pension. This table gives the general position, based on MoneyHelper's guide to pensions after death. Each scheme has its own rules, so always check with the scheme itself.
| Type of pension | What usually happens | Does it go through probate? |
|---|---|---|
| Defined contribution: a pot of money (most personal pensions, self-invested personal pensions and modern workplace pensions) | What is left in the pot is paid to the people nominated, as a lump sum, a regular income or both. | Not usually. Only if it is paid to the estate. |
| Defined benefit (final salary or career average) | There is no pot. The scheme may pay a pension to a husband, wife, civil partner, dependant or children under 23, and sometimes a lump sum. | Not usually. Payments go to the people the scheme rules name. |
| Annuity (a pension income bought from an insurer) | Payments stop, unless it was a joint annuity, had a guarantee period or had value protection. | Only if the remaining payments are paid to the estate. |
| State Pension | Payments stop. A surviving husband, wife or civil partner may be able to inherit some extra State Pension. | No. Any payments made after the death may have to be repaid from the estate. |
Defined contribution pensions
With this kind of pension, the person built up a pot of money. Whatever is left when they die can usually be passed on. The people who inherit it can normally choose to take it as a lump sum, keep it invested and draw from it over time, or use it to buy an income. They can be anyone the scheme decides to pay, not just a husband or wife.
Defined benefit pensions
A final salary or career average pension promises an income rather than building a pot, so there is no pot to pass on. Instead, MoneyHelper explains that the scheme may pay a dependant's pension to a partner, or to children up to age 23. If the person died before taking their pension, there may also be a lump sum. If they died early in a guarantee period, the scheme may pay the rest as a lump sum (a pension protection lump sum).
Annuities
An annuity is a regular income bought from an insurance company, often with a pension pot at retirement. Most stop when the person dies. A joint annuity carries on paying the surviving partner. One with a guarantee period carries on until that period ends, and the remaining payments may go to a named person or to the estate.
What happens to the State Pension when someone dies?
The State Pension stops when someone dies, and it cannot be left to anyone in a will. The Tell Us Once service lets the Department for Work and Pensions know about the death and stop the payments. Tell Us Once does not cover private or workplace pensions, so each of those needs to be told separately.
If any State Pension was paid after the death, it may have to be repaid. GOV.UK lists overpaid benefits among the debts the executor pays from the estate. Our guide to what happens to debt when someone dies explains how those debts are paid.
A surviving husband, wife or civil partner may be able to inherit part of their partner's State Pension. Under the new State Pension, they can inherit half of their partner's "protected payment", but only if they married or formed their civil partnership before 6 April 2016. Separately, a surviving partner under State Pension age may be able to claim Bereavement Support Payment.
Does a will decide who gets a pension?
Usually not. Because most schemes have discretion over who to pay, the will has no say. What the scheme looks at instead is the nomination form, also called an expression of wish form or beneficiary form.
An expression of wish form is a form you give your pension scheme, naming the people you would like to receive your pension when you die. It guides the scheme's decision, but in most schemes it does not bind it.
An expression of wish is exactly that: a wish. MoneyHelper says the scheme will usually choose the people listed on it, but it does not have to. The scheme can also consider other people, such as anyone who was financially dependent on the person, which is why an out-of-date form, naming a former partner for example, can still cause real difficulty.
For your own pensions, that means:
• Fill in a nomination form for every pension you have, including old workplace pensions from previous jobs.
• Update it when life changes: after marriage, divorce, a new partner, a new child, or the death of someone you named.
• Make sure your will and your nominations fit together. A will cannot override a pension nomination, so it helps to review them at the same time. Our guide to writing a will covers what else to think about.
What if we were not married?
An unmarried partner can be named on a nomination form, and most schemes that pay at their discretion will consider them. Dependants' pensions from final salary schemes are stricter. The law treats an unmarried partner as a dependant only where the scheme is satisfied that there was financial dependence or mutual dependence between them, or dependence because of a disability. If you live together without being married, our guide to estate planning for cohabiting couples explains why the paperwork matters even more.
Is an inherited pension taxed?
Whether an inherited pension is taxed depends mainly on how old the person was when they died. If they died before 75, the money is usually tax-free. If they died at 75 or over, the person who inherits pays Income Tax on it at their own rate. GOV.UK sets out the rules for each type of payment.
• Died before 75. Lump sums, and income from an inherited pension pot, are usually tax-free. A lump sum can be taxed if it is above the person's lump sum and death benefit allowance. For most people this allowance is £1,073,100 in 2026 to 2027, reduced by any tax-free cash they took in their lifetime.
• Died at 75 or over. The money is taxed as the beneficiary's income. The pension provider deducts the tax before paying it out.
Until now, a tax-free payment could become taxable if the scheme paid it more than two years after it learned of the death. In the Budget on 28 October 2026, the government announced that this two-year limit will be removed for payments made on or after that date. The change will be made by Finance Bill 2026-27, which has not yet become law. Until it does, it is still sensible to make the claim promptly.
Pensions and inheritance tax from 6 April 2027
This is the biggest change to pensions after death in many years, and it is already law. Currently, a pension that the scheme pays at its own discretion does not usually count towards inheritance tax. That changes for deaths on or after 6 April 2027.
For deaths on or after 6 April 2027, most unused pension funds and pension death benefits will count as part of the estate for inheritance tax. The personal representatives, meaning the executor or administrator, must report the pension to HMRC and are responsible for paying any tax due on it. The change is made by the Finance Act 2026.
The pension itself still will not usually go through probate. The scheme still pays the people nominated. What changes is that its value is added to the rest of the estate when working out inheritance tax. Inheritance tax is charged at 40% on the part of an estate above the £325,000 threshold. The threshold can be higher where a home passes to children or grandchildren. A pension can push an estate that was under the threshold over it.
Some things are left out. According to HMRC's technical note:
• Death in service benefits from a registered pension scheme are not counted.
• Dependants' pensions from final salary schemes, and joint annuities paid to a surviving dependant, are not counted.
• Anything left to a husband, wife or civil partner is still free of inheritance tax, as it is for the rest of the estate. Gifts to charity stay exempt too.
What the April 2027 change means for executors
For deaths on or after 6 April 2027, executors will have to find every pension and get its value, even though the pension does not pass through their hands. If inheritance tax is due, HMRC's technical note explains that the personal representatives must send HMRC an account of the whole estate before they can apply for probate. HMRC's guidance sets out how this will work:
• Valuations. A pension scheme must give the personal representatives the information they ask for within 28 days.
• Paying the tax from the pension. The personal representatives, or a beneficiary, can ask the scheme to pay inheritance tax due on the pension directly to HMRC, as long as it is at least £1,000. The scheme then has 35 days to pay.
• Holding money back. The personal representatives can ask a scheme to hold back up to 50% of a beneficiary's pension money, for up to 15 months after the end of the month of death, while the tax is worked out.
• Shared responsibility. Once the pension has been paid out, the people who received it can also be asked to pay the tax due on it.
Some online guides, written before the law was finalised, still say the pension scheme will pay the tax. Under the rules that were passed, the scheme is not liable. The personal representatives are, although they can ask the scheme to pay from the pension.
HMRC has said it will publish further guidance and supporting materials before the changes start in April 2027, and the inheritance tax forms are expected to change. Our inheritance tax guide explains the wider rules.
If you are the executor: what to do about pensions
Even when a pension does not go through probate, the executor usually has to deal with it. The steps are much the same for most schemes:
1. Find every pension. Look through paperwork, payslips, bank statements and emails for scheme names. The free Pension Tracing Service on GOV.UK can find contact details for old schemes. It cannot tell you whether a pension exists or what it is worth, so you will still need to contact each scheme.
2. Tell each scheme about the death. Each scheme will tell you what it needs, which is usually the death certificate and the person's National Insurance number. Ask who the scheme intends to pay, and whether anything is payable to the estate.
3. Tell the government. Tell Us Once covers the State Pension and other benefits, but not private pensions.
4. Report the pension to HMRC if a full inheritance tax account is needed. If the estate needs the full IHT400 account, form IHT409 asks about any pension other than the State Pension. For deaths on or after 6 April 2027, include the pension values when working out the tax.
5. Keep the pension money separate. Unless the scheme pays it to the estate, the pension money belongs to the people the scheme chooses, not to the estate. It is not shared out under the will.
Our guide to being an executor explains the wider role, and our guide to what to do when someone dies covers the first few weeks.
Frequently asked questions
Do pensions pass to the next of kin?
Not automatically. Most private and workplace pensions go to whoever the scheme decides to pay, guided by the person's nomination form. That is often a husband, wife, partner or child, but it does not have to be.
When your husband or wife dies, do you get their pension?
Often, yes, but it depends on the pension. A pension pot usually goes to whoever the scheme decides, guided by the nomination form. A final salary scheme usually pays a husband, wife or civil partner a dependant's pension, which is a share of the pension the person was promised. From the State Pension, you may be able to inherit some extra pension, depending on when you married. Ask each scheme what you are entitled to.
How long after someone dies do you get their pension?
There is no fixed timescale. The scheme first has to be told about the death, check who it should pay, and sometimes look into who depended on the person. Because most pensions do not go through probate, you do not need to wait for a Grant of Probate before the scheme pays.
What happens to a pension if there is no beneficiary?
The scheme will usually still decide who to pay, looking at the person's family and anyone who depended on them. If no one suitable can be found, or the scheme rules require it, the money is paid to the estate. It then goes through probate and is shared out under the will, or under the intestacy rules if there was no will.
Does this apply in Scotland and Northern Ireland?
The pension tax rules apply across the UK. What this guide says about estates, executors and probate covers England and Wales only. Scotland and Northern Ireland have their own processes for dealing with an estate.
Talk it through with us
So, to the question many families start with: most pensions do not go through probate. The scheme pays the people the person nominated, and the will does not decide who that is. The exceptions are pensions paid to the estate, and from 6 April 2027 the inheritance tax rules will bring most pensions into the executor's work even when the money never passes through their hands.
This guide is general information about the law in England and Wales. It is not advice on your family's situation, which will always depend on the facts and the rules of each scheme.
If you are an executor trying to work out which pensions belong in the estate, or what the April 2027 changes mean for an estate you are dealing with, we can help. Call us on 020 8515 2790 for a free, no-obligation 20-minute chat, or send us an enquiry. You can also read about our probate and estate administration service.
Author Bio:
Nasreen Akhter is the founding director of Ash Hill Solicitors and a private client solicitor with over a decade of experience in probate, wills, estate planning and elderly client care. Known for her calm, compassionate approach, she guides individuals and families through life's most sensitive legal matters with clarity and care.
Nasreen is also an accredited civil and commercial mediator, and is listed on the Solicitors Regulation Authority (SRA) register. Outside of work, she's a dedicated mum and chairs Happy Orphans Worldwide, a charity supporting vulnerable children worldwide.
