HMRC · Pensions Tax Manual · checked 3 September 2026

Pension death benefit claim: who decides, and how to actually claim it

A pension death benefit is not claimed through probate, and it is not handed out under the will. Each scheme is contacted and claimed from separately, and in most schemes it is the trustees or the provider who decide who is paid — guided by the nomination on file, but not bound by it. For most lump sums where the person died under 75, HMRC's two-year window runs from when the scheme administrator learns of the death, not from the death itself, and missing it changes the tax, not the right to claim. This page covers who actually decides, what each type of pension can pay, the two-year rule in HMRC's own words, and the one genuine change arriving on 6 April 2027 — scoped honestly, because the process differs scheme by scheme.

In most pension schemes, the trustees or the provider decide who is paid — not the will, and not the person who died. Most workplace and personal pensions are held in a trust, or under a contract with the provider, that sits outside the estate. That structure is why the will has no say: the will disposes of what the person owned, and the pension pot was never theirs to leave in that sense. HMRC's own manual puts the position bluntly:

The form the person filled in — called an expression of wish, a nomination or a death benefit nomination depending on the scheme — is exactly what its name says. HMRC's Inheritance Tax Manual (IHTM17052) describes these forms as “generally not binding nominations. They are simply letters of wishes that record what the member would like to happen with the death benefits.” A gift in a will is an instruction the executor must carry out; an expression of wish is a steer the trustees must consider, alongside the scheme's rules and everyone else who could qualify — a spouse or civil partner, children under 23, and anyone the scheme administrator accepts was financially dependent on the person (PTM071200). In practice a current, clearly worded nomination is usually followed. The point is that it is followed because the trustees chose to, and that choice is the legal event that creates the entitlement: as HMRC's April-2027 technical note says, “Until the trustees have made their decision, no beneficiary has an actual entitlement to the death benefits.”

That discretion is not a quirk — it is the reason pensions have sat outside inheritance tax. Under current law, where the provider has a genuine discretion over who is paid, the payment “is not treated as part of the estate whether or not any letter of wishes is followed” (IHTM17052). From 6 April 2027 that tax consequence changes (see §V) — but the discretion itself does not, and the process in this section still governs who is paid.

For the fuller treatment of nominations — what to write, when to update, and what goes wrong with a stale one — see our page on the expression of wish; for the decision itself and how trustees weigh competing claims, see who gets your pension when you die. This page moves on to the claim.

Most people have more pensions than their family knows about, and every one of them is a separate claim. There is no central register a family can claim from, and no single form. Each scheme has to be found, told of the death, and asked for its own claim form. Two things make this manageable: a complete list, and a dated note of when each scheme was told — because the two-year window in §IV is measured from the scheme's knowledge, not from the funeral.

Keep one sheet: scheme, reference, the date you notified them, the name of who you spoke to, and what they asked for. It is the record you will need if a two-year question ever arises, and it is the thing families most often find they did not keep. For the calm, first-days overview of this topic before the multi-scheme detail above, see what to do about pensions when someone dies.

A defined contribution pot, a final salary scheme and an annuity are three different claims with three different sets of possible benefits and the scheme will tell you which you are dealing with before it tells you anything else.

The State Pension is not a death benefit and is not claimed. It is paid to the person and the Pension Service ends it once told of the death — Tell Us Once does this. A surviving spouse or civil partner may be able to inherit certain additional amounts — part of an Additional State Pension, a "protected payment", or extra built up by deferral — depending on when the marriage or civil partnership began and when each person reached State Pension age; GOV.UK sets out the conditions. Nobody else can inherit any of it.

The clock does not start on the date of death it starts on the earlier of the date the scheme administrator first knew of the death, and the date they could reasonably have been expected to know.

That second limb matters. A family that delays telling a scheme does not push the window back indefinitely, because HMRC's test also asks when the administrator could reasonably have known. Here is the rule in HMRC's own words, for the most common defined contribution case:

What this wording does and does not cover. It is the rule for an uncrystallised funds lump sum death benefit — a lump sum from a defined contribution pot the person had not yet drawn on. The same two-year test, in the same words, governs a defined benefits lump sum death benefit (PTM073100), and HMRC applies the same "relevant two-year period" to designating unused funds into beneficiary's drawdown — designate late and the income drawn from it becomes taxable (PTM072430). It is not a universal rule for every pension death benefit: a survivor's pension from a defined benefit scheme is taxed as the recipient's income whatever the timing and whatever the age, and an annuity follows its own contract. Ask the scheme which benefit type you are claiming before you assume the window applies.

What "taxable" means here. For a lump sum paid to an individual, the whole sum is taxed as that person's income — GOV.UK's plain guidance: “You'll need to pay Income Tax on the whole lump sum. The pension provider will deduct any tax due before making payment to you.” Where a taxable lump sum is paid to a non-qualifying person — a trust, a company, or the personal representatives receiving it for the estate — it is charged instead at the 45% special lump sum death benefits charge (PTM073010). The 55% figure that circulates online belongs to a different mechanism, the unauthorised payments regime, and is not the automatic consequence of a late claim — see the FAQ. Even inside the window, a lump sum is tax-free only up to the person's lump sum and death benefit allowance — £1,073,100 for most people at 6 April 2024 — with any excess taxed at the recipient's marginal rate.

Age 75 changes everything above. If the person was 75 or over when they died, the lump sum is taxable however quickly it is paid; the two-year window is irrelevant to tax, though the scheme's own timescales still apply.

From 6 April 2027 most unused pension funds and death benefits are counted in the estate for inheritance tax a change to how much tax may be due, not to who decides who is paid, and not to the two-year income tax window above.

This is now statute, not proposal. Finance Act 2026 (Royal Assent 18 March 2026) inserted a new s.150A IHTA 1984, which treats a member of a registered pension scheme “as beneficially entitled immediately before their death to property ('notional pension property')” — broadly, the value held in the scheme for them, less any excluded benefit. Section 71 of the Act applies the change “in relation to deaths … occurring on or after 6 April 2027.” HMRC's technical note is equally clear on the other side of the line: “If the pension scheme member dies before 6 April 2027, then the current rules will apply even if pension benefits are paid to their beneficiaries after this date.”

Until then, the current position stands — a discretionary death benefit is not part of the estate for inheritance tax “whether or not any letter of wishes is followed” (IHTM17052). Read that sentence with the date attached, never without it.

What stays outside, even after April 2027. The statute lists the excluded benefits (s.150A(6)):

• A dependants' scheme pension — the survivor's pension from a defined benefit scheme.
• A trivial commutation of one.
• A dependants' or nominees' annuity bought together with the member's own annuity.
• Death-in-service benefits — amounts payable only because the person was in employment immediately before death.

And the spouse and civil partner exemption is untouched: what passes to a surviving spouse or civil partner is exempt in the usual way, so the scheme will need to know who the beneficiaries are before the tax position is known.

Who pays, and when. The personal representatives “will be responsible for reporting and liable for paying any Inheritance Tax due on notional pension property”; once the trustees have decided and a beneficiary is entitled, that beneficiary becomes jointly and severally liable with them for the tax on their share. Schemes themselves are not normally liable. The tax is “due as normal at the end of the sixth month” after the date of death — the same due date as the rest of the estate — with interest after that, and, unlike a house, notional pension property cannot be paid by ten-year instalments. Two tools exist to make that workable: a personal representative can serve a withholding notice requiring a scheme to hold back up to 50% of a beneficiary's entitlement for up to 15 months after the end of the month of death, and a personal representative or beneficiary can serve a payment notice under the Pensions Direct Payment Scheme (s.226B IHTA 1984) requiring the scheme to pay the tax on that pension straight to HMRC. The information-sharing regulations that make this run (SI 2026/818) come into force on 6 April 2027; HMRC has said the full guidance, templates and tools will be published for April 2027.

What this does not change. The trustees still decide who is paid (§I). The two-year income tax window still runs from the scheme's knowledge (§IV). From April 2027 both taxes can apply to the same benefit — inheritance tax on the estate's side, income tax on the recipient's — and HMRC's technical note (section 8) is where the interaction is set out; if an estate is anywhere near the threshold, that interaction is a professional's question, not a page's.

Model the estate side with the IHT calculator, and see how the nil-rate bands work for the rest of the picture.

Checked directly against HMRC's Pensions Tax Manual and Inheritance Tax Manual, GOV.UK's guidance and technical notes, and legislation.gov.uk on 3 September 2026. This page explains how the rules work; it is not advice on your situation, and it does not tell you which of a scheme's options to take — that is regulated financial advice. HMRC has said it will publish its full April-2027 guidance in spring 2027.

Three ways to act on this, depending on where you are.

One reader is the executor right now, working through a full list of accounts and providers to contact. Another wants to check that their own nomination still says what they intend before anything happens. A third wants to understand, in advance, how a scheme will actually decide who gets paid.