What benefits will my family get from my pension when I die?

This depends on what type of pension you have and whether you die while you are still working for the employer who provides the scheme, or after you have left. You should ask your pension scheme provider or administrator for more information. You should also check what paperwork you need to fill in to provide information about who you would like any benefits to be paid to.

If you have a money purchase pension of any sort and die before you draw your pension, you can expect that the value of your pension pot will be paid to a dependant, probably as a lump sum. Depending on the scheme rules, this may be paid automatically to the person you have nominated, or it might be paid "at the discretion of the trustees" – this means that it can be paid tax-free. Your employer may also provide a life assurance arrangement that may pay out a multiple of your salary: this may be linked to the pension scheme or a separate insured arrangement.

A good money purchase scheme will also provide a pension for your spouse or partner if you die before you draw your pension, but many schemes will not provide this. If you have a money purchase arrangement and die after you have drawn your pension, then what (if anything) will go to your family when you die will depend on what choices you have made when you bought your annuity.

If you have a salary-related pension, a pension will be paid to your spouse or civil partner when you die. This will generally be half your pension, but it could be more or less than this, depending on how good the scheme is and when you die. In particular, benefits paid to members who have left the scheme with a deferred pension and have not yet retired tend to be less generous. You should also bear in mind that the employer may refuse to pay a pension to an unmarried partner, though most schemes will allow for this and, in February 2017, the Supreme Court ruled that an unmarried cohabiting partner should be entitled to a survivor’s pension. It is common for schemes to reduce the pension payable to a spouse or partner who is more than ten years younger than you.

Some schemes will also pay a pension to dependent children, though this might be paid only if there is no spouse. You will need to check what your own scheme rules say about this.

if you die while still in employment, a lump sum will probably also be paid, typically two or three times your salary. You should check what paperwork you need to fill in to tell the trustees who you would like this money to go to.

If you die shortly after retirement, during what is called the 'guarantee period' (usually five years) a lump sum will also be paid.

If you die after you have left the scheme with a deferred pension but before you retire, then a lump sum may be payable, but not all schemes provide this, and it may be a much smaller lump sum than if you were still working for the employer.

Note: This content is provided as general background information and should not be taken as legal advice or financial advice for your particular situation. Make sure to get individual advice on your case from your union, a source on our free help page or an independent financial advisor before taking any action.

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