The basic state pension, available to those 66 or older who’ve made sufficient National Insurance<\/a> contributions, generally isn’t inheritable. <\/p>\n However, complexities arise with the Additional State Pension, applicable to men born before 6 April 1951, and women born before 6 April 1953. <\/p>\n This additional component may have different rules regarding inheritance, highlighting the need for personalized advice. <\/p>\n A surviving spouse’s own National Insurance contributions and any deferred pension payments can also influence what, if any, benefits continue after a death.<\/p>\n For clarity on your individual situation and to ensure your estate plan accurately reflects your wishes, contacting the Pension Service directly is highly recommended. They can provide tailored guidance based on your specific circumstances.<\/p>\n Here, experts explain what generally happens to your pension after death.<\/p>\n open image in gallery<\/p>\n The state pension generally is not inheritable (Getty\/iStock)<\/p>\n A few scenarios to consider<\/p>\n Inheritance rules regarding the state pension can be complex, varying depending on individual circumstances. While the state pension generally isn’t inheritable, certain situations allow for spouses or civil partners to receive additional benefits.<\/p>\n If death occurs before reaching state pension age, a surviving spouse or civil partner who hasn’t yet reached pension age may be eligible for additional pension benefits.<\/p>\n Get a free fractional share worth up to \u00a3100. Terms and conditions apply.<\/p>\n Go to website<\/a><\/p>\n ADVERTISEMENT<\/p>\n Get a free fractional share worth up to \u00a3100. Terms and conditions apply.<\/p>\n Go to website<\/a><\/p>\n ADVERTISEMENT<\/p>\n For those who pass away after reaching state pension age, the rules differ depending on the pension system. Under the pre-2016 system, if the deceased received the Additional State Pension, their partner might inherit a portion of it. Those on the post-2016 system may be entitled to increased pension payouts.<\/p>\n If the state pension was deferred and hadn’t been claimed before death, the surviving spouse or civil partner may receive a lump sum payment or increased payments on their own pension.<\/p>\n It’s important to note that the state pension is typically linked to an individual’s National Insurance contributions and therefore doesn’t automatically transfer to a spouse or partner upon death.<\/p>\n What happens to private pensions when you die?<\/p>\n Private pensions work very differently, and in many instances can be passed on to a beneficiary or beneficiaries in the event of your death. There are two kinds of workplace pensions, however, and it\u2019s important to understand what they are, how they work, and how passing them on can differ.<\/p>\n \u201cWorkplace pensions come in two main types: defined contribution (DC) and defined benefit (DB),\u201d explains Fiona Peake, personal finance expert at Ocean Finance. <\/p>\n open image in gallery<\/p>\n Income tax likely needs to be paid by your beneficiaries on DC pension withdrawals if you die after the age of 75 (Getty)<\/p>\n \u201cWith a DC pension, it\u2019s all about the pot of money you\u2019ve built up. If you pass away before age 75, your beneficiaries can usually access this money tax-free, as long as it\u2019s paid out within two years. After 75, they\u2019ll likely need to pay income tax<\/a> on any withdrawals at their own rate.\u201d<\/p>\n An important element here is in whether beneficiaries have been nominated.<\/p>\n If they have, either by informing your pension provider or by naming beneficiaries in your will, they will typically receive your DC pension under the conditions Ms Peake has explained.<\/p>\n In cases where no beneficiary has been named, the pension provider may decide where it goes on your behalf and it will typically be endowed to your estate. Under these circumstances, the funds would be eligible for inheritance tax<\/a>, depending on the total value of your estate.<\/p>\n If you\u2019ve already begun drawing your private pension, the ways it can be passed on will be affected by how you decided to access it.<\/p>\n If you chose a drawdown option, in which the bulk of your money remains invested while you withdraw what you need, anything remaining in your fund can usually be inherited by a beneficiary.<\/p>\n \u201cLump sum payments or setting up an income for beneficiaries are both common options,\u201d says Ms Peake.<\/p>\n open image in gallery<\/p>\n Your spouse or dependants may receive payments depending on the terms of your annuity (PA)<\/p>\n For those who opt for annuities, however, the terms can be more limiting.<\/p>\n \u201cIf you\u2019ve bought an annuity with your pension, it\u2019s important to check the terms,\u201d Ms Peake continues. <\/p>\n \u201cA basic annuity stops paying out when you die, but if you\u2019ve got a joint or guaranteed term annuity, there might be payments that continue to your spouse, partner, or dependants.\u201d<\/p>\n That\u2019s defined contribution pensions covered, but what about defined benefits pensions?<\/p>\n DB pensions, sometimes known as final salary pensions, provide a continued, guaranteed income rather than a money pot from which to draw. <\/p>\n \u201cWhen you pass away, some schemes might pay a percentage of this income to your spouse, partner, or dependants,\u201d explains Ms Peake. <\/p>\n \u201cThe exact rules depend on the scheme, so it\u2019s worth checking with your provider to see what applies.\u201d<\/p>\n If you have a DB pension in place but your spouse or civil partner is not listed with it, it will typically stop upon death unless that particular scheme allows for continued payments to your children or other dependants. Regardless of the type of private pension you have, it\u2019s important to name your beneficiaries and keep that information up to date.<\/p>\n \u201cOne area where people can sometimes lose out is forgetting to nominate a beneficiary for their pension,\u201d says Ms Peake. <\/p>\n \u201cMost workplace pensions let you name who you\u2019d like to benefit from your pension when you die, and it\u2019s something you can usually update if your circumstances change. For example, if you\u2019ve divorced or remarried, you might want to revisit this to make sure it reflects your wishes.\u201d<\/p>\n Looking forward<\/p>\n Pension rules face a significant overhaul in April 2027, impacting how they are taxed after death, according to Joshua White, Head of Growth at Level. <\/p>\n Currently, most unused pension funds<\/a> are exempt from inheritance tax<\/a>, but this will change. From April 2027, these funds will be included in the value of an estate for inheritance tax<\/a> purposes.<\/p>\n This change will particularly affect individuals on defined benefit schemes. Those on defined contribution pensions will be less impacted. <\/p>\n The shift also has broader tax implications, especially concerning “fiscal drag”, where frozen tax thresholds pull more people into the tax system due to wage inflation.<\/p>\n \u201cGiven current property prices and fiscal drag, we at Level estimate that around one million UK properties currently just below the inheritance tax threshold could become liable due to these changes. As property is often the main asset in an estate, this will bring many estates into the scope of inheritance tax for the first time,\u201d Mr White says.<\/p>\n \u201cIt\u2019s clear from HMRC\u2019s consultation notes that this change is designed to prevent pensions from being used as a tax-planning tool rather than a means of providing for retirement. Executors and beneficiaries need to be aware of the potential tax implications and plan accordingly.\u201d<\/p>\n It is important to be abreast of upcoming changes and how they will impact upon your situation.<\/p>\n If you\u2019re ever in doubt or need further guidance, it\u2019s never too late to get in touch with a financial adviser or pensions expert to assist with understanding your own circumstances, your options, and how you can pass on your pension when the time comes.<\/p>\n","protected":false},"excerpt":{"rendered":"Your support helps us to tell the story From reproductive rights to climate change to Big Tech, The…\n","protected":false},"author":2,"featured_media":56598,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[64,63,99,186,184,185],"class_list":{"0":"post-274651","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-au","9":"tag-australia","10":"tag-business","11":"tag-finance","12":"tag-personal-finance","13":"tag-personalfinance"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/274651","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=274651"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/274651\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/56598"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=274651"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=274651"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=274651"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"The](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2025\/08\/iStock-1223981468.jpeg\")
<\/p>\n![\"Trading](\"https:\/\/static.independent.co.uk\/static-assets\/images\/mobile-stores\/Trading_212.svg\")
<\/p>\n
Capital at risk.<\/p>\n<\/p>\n
Capital at risk.<\/p>\n![\"Income](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2025\/11\/newFile-6.jpg\")
<\/p>\n![\"Your](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2025\/11\/25ae4bb09408045402057d5bdb502f41Y29udGVudHNlYXJjaGFwaSwxNzQxNDI4NTI4-2.78681935.jpg\")
<\/p>\n