Does a pension automatically go to a spouse when you die?

Not automatically — it depends on your expression of wishes nomination form and the scheme trustees' decision. Without a current nomination trustees decide based on family circumstances. Always keep your nomination form up to date.

What Happens to Your Pension When You Die?

Pensions 6 min read • March 2026

What happens to your pension when you die?

Most people assume their pension automatically goes to their spouse or family. That is not how it works — and the mistake of assuming so can have significant consequences, both for inheritance tax and for who actually receives the money.

Pensions sit outside your estate (usually)

Unlike most assets, defined contribution pensions do not usually form part of your estate for inheritance tax purposes. The pension sits in a trust managed by the provider, and the trustees have discretion over who receives it. Under the rules applying before 6 April 2027, unused funds in many discretionary pension schemes are normally outside the estate for IHT purposes. This can reduce an estate's IHT exposure, although the actual tax saving depends on the value and circumstances of the wider estate.

Important change from 6 April 2027: Most unused pension funds and pension death benefits will be included in the value of the deceased's estate for inheritance tax purposes. This has been legislated for in Finance Act 2026 (Royal Assent 18 March 2026) and applies to deaths on or after 6 April 2027. Some benefits remain excluded, including death-in-service benefits from registered pension schemes and charity lump sum death benefits. Review your position ahead of this date.

Defined contribution pensions: the nomination form is critical

The pension trustees use your expression of wishes (nomination of beneficiaries form) as their primary guide. Without a completed, current nomination form, trustees must make a judgement call — which may not match your intentions.

Keep the form current

Update your expression of wishes after every major life event: marriage or civil partnership, divorce, birth of children or grandchildren, death of a previously nominated beneficiary. Review it every 2–3 years regardless.

Discretionary, not binding

The nomination form guides but does not legally bind the trustees. This discretionary structure is what keeps the pension outside your estate for IHT. If the form were binding, HMRC would treat it as a controlled asset.

Be specific

Name individuals, not just "my estate" or "my family". Specify percentages if you want to split between multiple beneficiaries. Consider what happens if a named beneficiary predeceases you — name contingent beneficiaries too.

Death before 75 vs death after 75

The age at which you die significantly affects the tax treatment of inherited pension benefits:

Death

Typical Income Tax treatment

Before 75

Benefits can generally be paid free of Income Tax, subject to the pension death-benefit rules and the deceased's available Lump Sum and Death Benefit Allowance

75 or over

Withdrawals are generally taxable at the beneficiary's marginal Income Tax rate

For someone dying before 75, the pension can generally pass to any nominated beneficiary free of Income Tax, subject to the pension death-benefit rules and the deceased's available Lump Sum and Death Benefit Allowance. If you're already in drawdown when you die, the remaining pot passes to your beneficiaries, who can continue drawing it down (an inherited 'flexi-access drawdown' fund) or take it as a lump sum.

Income Tax and inheritance tax are different taxes

Income Tax and inheritance tax are separate. The age-75 rules mainly determine the Income Tax treatment of inherited pension benefits. From 6 April 2027, most unused pension funds and death benefits will also be included when calculating the deceased's estate for IHT. A pension benefit can therefore have one treatment for Income Tax and a different one for IHT.

Defined benefit pensions: survivor pensions

Final salary and career average pensions typically pay a survivor's pension to a spouse or civil partner — usually 50% of the member's pension. Some schemes also pay a children's pension for dependent children. Cohabiting partners may or may not qualify depending on the scheme rules — check the specific terms of each defined benefit scheme you belong to.

The State Pension on death

Under the new State Pension (post-April 2016), limited inheritance provisions apply — broadly, you may inherit a percentage of your spouse's Additional State Pension accrued before 2016 if they reached pension age before that date. Contact the Pension Service to understand your specific entitlement.

The lets you model your own pot — check the if you have multiple pots to locate and review.

BritSavvy note

Check and update your expression of wishes with every pension provider you hold. It takes 10 minutes and is one of the most impactful estate planning steps available. The Pension Gap Simulator helps model your pension's value and trajectory.

Frequently asked questions

Does a pension go to a spouse automatically when you die?

Not automatically — it depends on your expression of wishes form and the scheme trustees' decision. The discretionary structure keeps the pension outside your estate for IHT purposes. Without a current nomination, trustees decide based on family circumstances.

Is a pension subject to inheritance tax?

Under the rules applying before 6 April 2027, most defined contribution pensions sit outside the estate and are not normally subject to IHT. From 6 April 2027, most unused pension funds and death benefits will be included in the estate for IHT purposes (Finance Act 2026, Royal Assent 18 March 2026) — some benefits, including death-in-service benefits, remain excluded. Income Tax on withdrawals is a separate question from IHT — see the note above.

What is an expression of wishes form?

A form completed with your pension provider naming who should receive your pension on death. It is not legally binding but is strongly considered by trustees. Update it after major life events and review every few years.