The state pension
Report the death as soon as possible, ideally through Tell Us Once. Payments stop, and because the state pension is often paid in advance or arrears, there may be an overpayment to return or a small amount still due to the estate. Depending on when the person reached state pension age and their circumstances, a surviving spouse or civil partner may be able to inherit part of it, so ask specifically.
Workplace pensions
What is payable depends on the type of scheme and whether the person had started taking it.
- Defined benefit (final salary): often a survivor's pension for a spouse, civil partner or dependent child, and sometimes a lump sum
- Defined contribution: the remaining pot is normally paid out under the scheme rules, guided by the nomination form
- Still working: there may be a death-in-service benefit through the employer, which is separate from the pension itself
Personal pensions and drawdown
The remaining fund is usually paid to the people named on the expression of wish or nomination form. The scheme's trustees normally have the final say, which is why an out-of-date nomination causes so many problems. Tax treatment depends on the person's age at death and the type of payment, so ask the provider to confirm the position in writing.
Pension death benefits often sit outside the estate, so they are not automatically covered by the will and may not count towards probate. Ask each provider whether the payment forms part of the estate.
What to do
- List every employer they worked for and trace old schemes
- Report the death to each provider and to the Pension Service
- Ask what is payable, to whom, and whether it forms part of the estate
- Ask about any death-in-service benefit through a current employer
- Check whether bereavement benefits can also be claimed