Pension inheritance
What is a pension beneficiary?
A pension beneficiary is the person, people or organisation you choose to receive your pension after your death. Choosing a beneficiary is an important part of the pension inheritance process and helps us to make sure your pot goes to the right person or people.
Even before you start claiming your pension pot – or if you’re keeping your pension pot where it is – you should nominate a beneficiary.
Can there be more than one person named to receive my pension?
Yes, you can have more than one pension beneficiary. If you choose to nominate more than one, you should tell us how you’d like your pension savings shared out. For instance, if you want two people to get half of it each, or if you’d like one person to get a quarter and another person to get the other three quarters.
Why it’s important to name your beneficiaries
It’s important to make sure we’ve got the right details for your beneficiaries so that our Trustee can consider your wishes after you’re gone.
This is one of the best ways to enhance the financial security of your loved ones. Naming your beneficiaries can also speed up the process of them receiving your funds, relieving pressure during an emotional period of time.
Can I change my beneficiaries?
Yes, you can change your beneficiaries through your online account or via our app.
There are plenty of reasons you may want to change your beneficiaries:
- New or ending relationships
- Having children
- Deaths
- Changes in financial circumstances and more
We highly recommend checking your beneficiary details on a regular basis to ensure beneficiary contact details and addresses are up to date.
Keeping on top of your beneficiaries ensures that the money you’ve saved goes to right person as easily as possible.
How to name or update my beneficiaries
You can name or update your beneficiary details now by logging into your account or within our mobile app.
FAQ: Pension inheritance questions
For more information, see our help and support section
Do my children inherit my pension?
Whether your children can inherit your pension depends on the type of pension you have. If you have a defined contribution pension, like ours at People’s Pension, you could choose your children as beneficiaries so they can inherit your pot.
If you die without nominating a beneficiary, the trustee will take into account any dependant children you may have when they determine who to pay your pot to.
Defined benefit pensions (sometimes known as final salary) and annuities (where you have a guaranteed income for life via an insurance company) can pay out to children in two ways.
- If you die before your pension age, the scheme may pay out a lump sum to someone you have nominated.
- If you die while collecting your pension, a spouse, partner, child under 23 (or older if disabled) may receive a percentage of your pension until they pass on.
If you have a defined benefit pension or an annuity, this will depend on your personal situation and the scheme. We recommend contacting the provider directly to confirm these details.
Do pensions pass to the next of kin?
The easiest way to ensure your next of kin receives your pension is to nominate them as a beneficiary.
When no beneficiary is named, the pension scheme trustees or administrator will choose who the pension is passed on to. This is usually a surviving spouse, civil partner or dependent children, but may vary depending on the complexity of your family circumstances. This process can be slower than naming a beneficiary.
Is it a good idea to transfer my pension?
Transferring your pension can be beneficial if it simplifies your finances or offers better returns or lower fees, but it’s vital to consider the long-term implications and any potential risks.
What are the rules on inheriting a pension?
The tax rules on inheriting a pension vary, depending on the age of the deceased.
If the person dies before age 75 – money is generally inherited tax free.
If the person dies after aged 75 – money inherited is subject to income tax at their marginal rate, this will be dependant on the tax position of the beneficiary.
The pension can often be paid out in one lump sum or in instalments, depending on the scheme.
Please be aware that the rules around inheritance tax for beneficiaries are changing in April 2027.
Update your beneficiary
Log in to your account and tell let us who you want to inherit your pension.
Learn more about beneficiaries
Read our blog on beneficiaries and your pension after death.
Contact our Bereavement team
If your relative has a pension with us and has passed away, we’re here to help.