Before anything else, one honest note. If you have come here because someone has recently died and you are trying to work out what happens to their pension, I am sorry, please do not feel you need to take any of this in today, or even this week. It will still be here when you are ready.
I am not a financial advisor and nothing in this post constitutes financial advice. All investments carry risk and the value of your investments can go down as well as up. Please do your own research and consider seeking independent financial advice before making any investment decisions.
What happens to my pension when I die is one of those questions that quietly nags at people, often for years before they actually look into it. I know that feeling well. Part of the reason it nags is that “your pension” is not really one thing. It could mean your state pension, a workplace or personal pension you have paid into for decades, or a SIPP you manage yourself. Each of those has its own answer, its own rules, and its own exceptions, which is exactly why the question feels so confusing whenever you try to google it properly. In the simplest terms, what happens to your pension when you die comes down to which of those three it actually is, so let me sort out which one applies to you, cover each honestly, and point you to where I have already gone deeper on the parts I have written about before.
What this post contains
What happens to your pension when you die? The short answer
Here is the short version, before we get into the detail. What happens to your pension when you die depends entirely on what kind of pension it is. Your state pension mostly stops when you die, with limited exceptions for a surviving spouse or civil partner. A workplace or personal pension, and a SIPP, can usually be passed on to whoever you choose, and how it is taxed depends on your age when you die and, from April 2027, a genuinely significant change to inheritance tax rules. Three different pensions, three different answers. Let us go through each one properly.
What happens to your state pension when you die
This is the part of the question most people get wrong, mostly because there’s no single, simple rule.
The first thing worth knowing plainly is that your state pension does not leave behind a pot of money the way a workplace pension or a SIPP does.
There is nothing sitting in an account waiting to be inherited. Instead, it mostly just stops on the day you die.
What actually happens to it when you die comes down to whether your husband, wife, or civil partner can inherit any part of it, and that depends on a genuinely confusing mix of dates, National Insurance history, and which state pension system you were on.
I want to be honest about that complexity rather than pretend it is simpler than it is.
If you reached state pension age before 6 April 2016, you were on what is now called the old, or basic, state pension. If your spouse or civil partner dies, you may be able to increase your own basic state pension using their National Insurance contributions, if you are not already getting the full amount yourself.
You may also be able to inherit part of their Additional State Pension or Graduated Retirement Benefit. None of this happens automatically. You need to contact the Pension Service to have it worked out and applied.
If you reached state pension age on or after 6 April 2016, you are on the new state pension, and the rules genuinely work differently. What happens in this system, comes down to three separate things you might inherit, and you do not automatically get all three.
You may inherit part of your late partner’s Additional State Pension, but only if your marriage or civil partnership began before 6 April 2016, and either your partner reached state pension age before that date, or they died before that date while still under state pension age themselves.
You may inherit half of your partner’s protected payment, an extra amount some people built up on top of the standard new state pension, but again only if the marriage began before 6 April 2016, and your partner reached state pension age and died on or after that date.
And if your partner died while deferring their state pension, or had started claiming it after deferring, you may be able to inherit part or all of the extra amount or lump sum they had built up, provided you were married or in the civil partnership when they died and they reached state pension age before 6 April 2016.
There is one rule that cuts across all of this and matters enormously.
You will not be able to inherit anything from your spouse or civil partner’s state pension if you remarry or form a new civil partnership before you reach state pension age yourself.
If you are not married or in a civil partnership, I want to be honest with you here too. Cohabiting partners, however long you have been together, generally have no automatic right to inherit any part of a state pension. That is a hard truth, and one that a lot of state pension guidance glosses over.
Given how many dates and conditions are stacked on top of each other here, the genuinely useful next step, whichever situation you are in, is to contact the Pension Service directly and ask them to work out exactly what you or your family can claim, rather than trying to self diagnose from a table on a website, mine included.
What happens to your workplace or personal pension when you die
Once you move past the state pension, what happens to my private pension when I die splits into two genuinely different stories, depending on what kind of scheme you have.
Defined contribution schemes. Most modern workplace pensions, and personal pensions you have set up yourself outside of a SIPP, work on a defined contribution basis, where you and your employer pay money in, it is invested, and you build up a pot of your own. For inheritance purposes, these largely work the same way a SIPP does.
The money sits in a discretionary structure, meaning the scheme trustees or administrator, not your will, decide who actually receives it when you die, guided by the expression of wish form you filled in when you joined.
That discretionary arrangement is what currently keeps most defined contribution pensions outside your estate for inheritance tax purposes, which I explain properly in my guide to what a SIPP actually is, since the mechanics are very close.
Defined benefit, or final salary, schemes. This is where I want to be honest about something most generic pension content glosses over, because it genuinely surprises people.
A defined benefit pension does not have a personal pot sitting there waiting to be passed on the way a defined contribution pension does. Instead, it pays a promised income, usually based on your salary and years of service.
What happens when you die depends entirely on your scheme’s own rules, and I would rather say that plainly than pretend there’s one universal answer. In many cases, a surviving spouse or civil partner receives a reduced pension, often somewhere around half of what you were being paid, for the rest of their life.
Some schemes also pay a pension to dependent children until a certain age. But for anyone who is not a spouse, civil partner, or dependent child, defined benefit schemes very often pay nothing at all when the member dies, particularly once the pension is already in payment.
If you have a final salary pension, it is genuinely worth checking your own scheme booklet or contacting the scheme directly to understand exactly what your family would receive, rather than assuming it works the same way a personal pension does.
What happens to your SIPP when you die
I have already written a proper deep dive into this, so I will keep it brief here and point you to the detail rather than repeat it.
Currently, most SIPPs sit outside your estate for inheritance tax purposes, in the same discretionary structure as a defined contribution workplace pension. What actually matters most for your beneficiaries, though, is your age when you die, not the inheritance tax position on its own.
Die before your 75th birthday, and your SIPP can usually be passed to your beneficiaries free of income tax, provided the money is designated to them within two years and falls within your Lump Sum and Death Benefit Allowance.
Die at 75 or later, and your beneficiaries pay income tax at their own marginal rate on whatever they draw from the inherited pot, with no equivalent tax free ceiling in place.
I have gone through the full detail, including the before and after 75 rules and exactly what is changing in 2027, in my dedicated guide to SIPP inheritance tax, which is the natural next stop if a SIPP is the part of this question that actually applies to you.
The April 2027 change, across every type of pension
One change is coming that touches private pensions, workplace pensions, and SIPPs alike, though not your state pension, so it is worth understanding once, here, rather than repeating it for each type above.
From 6 April 2027, most unused pension funds and pension death benefits will be brought within the value of your estate for inheritance tax purposes, under legislation being introduced through Finance Bill 2025 to 2026. Your personal representatives, rather than the pension scheme itself, will be responsible for reporting and paying any inheritance tax due.
The exemption for anything left to a spouse or civil partner is explicitly preserved, and death in service benefits stay outside the scope of the change entirely.
According to HMRC’s own impact assessment, most estates holding pension wealth will still owe nothing at all once the change takes effect, it is mainly larger combined estates that will feel it.
If what happens to my private pension when I die is the question that brought you here, this is the single biggest thing to understand about your future.
This pensions inheritance tax change is genuinely one of the biggest shifts to UK estate planning in years, which is exactly why I have gone through it properly, section by section, in my SIPP inheritance tax post, since the mechanics are identical whether the pension involved is a SIPP or a workplace scheme.
Figures correct at the time of writing, based on the current legislative proposal. Always check gov.uk for the latest position before making decisions based on this.
Who should think about this now
I am not going to hand you a tidy list of tactics here, because this is exactly the kind of decision where acting on generic advice that does not fit your own situation can be expensive and hard to undo.
What I can tell you honestly is that this matters most right now if your combined estate, pensions included, is likely to sit above your available nil rate band once everything is added together, or if you are already drawing a pension after 75 with a larger estate behind it.
If either of those sounds like you, or you simply want clarity before 2027 arrives, this is a genuinely good moment to speak to a regulated financial adviser or a solicitor who specialises in estate planning, rather than trying to plan around it from a blog post, mine included.
I go into when that kind of advice is worth paying for, and when it genuinely is not necessary, in my post on SIPP advice.
None of this sits apart from the rest of your finances either. If you are weighing up a pension against an ISA for passing money on, I have gone through the inheritance tax side of that in my post on whether ISAs are subject to inheritance tax, and compared the two properly in my SIPP vs ISA guide.
And if you are still working out the bigger picture of what you might need in retirement and what you might leave behind, my post on how much you need to retire in the UK is a reasonable place to start.
If you are earlier in your journey, still building your pension rather than thinking about passing it on, none of this needs to keep you up tonight. It is worth knowing the shape of it, but it is not urgent for you the way it might be for someone closer to drawing their pension with a larger estate behind them.
Whatever stage you are at, having a clear answer to what happens to my pension when I die, for the specific pension or pensions you actually hold, is worth far more than a general sense of unease about the question.
FAQ
Does my pension die with me?
It depends which pension you mean. Your state pension mostly does stop when you die, with limited exceptions for a surviving spouse or civil partner.
A workplace, personal pension, or SIPP generally does not die with you. It is usually passed on to whoever you named on your expression of wish form, at the discretion of the scheme administrator.
What happens to my workplace pension if I die before retirement?
If it is a defined contribution scheme, the pot you have built up so far is usually passed to your chosen beneficiaries, income tax free if you die before 75, in the same way as a SIPP.
If it is a defined benefit scheme, your family may receive a pension for a surviving spouse or civil partner, and sometimes for dependent children, but the exact terms depend entirely on your scheme’s own rules, so it is worth checking your scheme booklet directly.
Can my partner inherit my state pension?
If you are married or in a civil partnership, they may be able to inherit part of your state pension, though never automatically the whole thing, and the amount depends on when you each reached state pension age and when your marriage or civil partnership began.
If you live together but are not married or in a civil partnership, they generally cannot inherit any part of your state pension.
What happens to a final salary pension when you die?
It depends entirely on your scheme’s own rules, so I would rather say that honestly than give you a false sense of certainty. In many cases a surviving spouse or civil partner receives a reduced pension for life, and sometimes dependent children receive something until a certain age.
For anyone else, final salary schemes very often pay nothing at all, particularly if the pension is already in payment when the member dies.
Is a pension part of my estate?
Currently, most workplace pensions, personal pensions, and SIPPs sit outside your estate for inheritance tax purposes, because of the discretionary way they are structured.
That is changing from 6 April 2027, when most unused pension funds are due to come into the scope of inheritance tax. Your state pension has never formed part of your estate, since it stops rather than leaving behind a pot.
What happens to an unused pension pot?
If it is a defined contribution pension, SIPP included, the unused pot is usually passed to whoever you named on your expression of wish form. Whether your beneficiaries pay tax on it, and how much, depends on your age when you die.
Die before 75, and it can usually be passed on income tax free within certain limits. Die at 75 or later, and your beneficiaries pay income tax at their own marginal rate on what they draw out.
Do private pensions have to go through probate?
Generally, no, though this can vary by scheme. Because most private pensions, including SIPPs and workplace pensions, sit outside your estate and are paid at the scheme administrator’s discretion rather than under the terms of your will, they usually do not need to go through probate the way your other assets do.
This is one of the practical advantages of how pensions are currently structured.
Angelina is the founder of Investing Adventures, where she helps women build confidence with money and investing. With seven years of personal investing experience, she breaks down complex financial topics into practical, actionable advice. Her mission is simple: to help more women take the driver’s seat in their financial future.
I am not a financial advisor and nothing in this post constitutes financial advice. All investments carry risk and the value of your investments can go down as well as up. Please do your own research and consider seeking independent financial advice before making any investment decisions.