You can make sure your loved ones and/or a favourite charity receives your retirement savings if you die before you take them. To do this you need to nominate your beneficiaries.
The lump sum is paid at the discretion of the Trustee, and therefore falls outside your estate and is generally free from inheritance tax.
An exercise to gather information about potential beneficiaries will take place, but the Trustee will normally be guided by any expression of wish held on record. It’s important that you keep your expression of wish details up-to-date to help the Trustee (this is done by completing a nomination form).
If you die before you’re 75, your beneficiaries can receive your remaining pension pot as a lump sum – as long as your total pension savings are less than the lifetime allowance (£1.03 million for the 2018/2019 tax year). If you die after you’re 75, your beneficiaries will have to pay tax on any cash sum paid.