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What happens to a person’s pension after they die?

For most of our lives, we will save into pensions, regularly contributing some of our money into our pot.

If you have lost a loved one recently you will be interested in what happens to this money and will want to understand the rules surrounding surviving pension savings.

If that is the case, here are several things you should take into consideration.

What to do first

You should first obtain information from the deceased’s paperwork to discern whether they received a pension and what kind.

If the deceased received a State Pension at the time of their death, you should contact the Department of Work and Pensions to inform them of the death. This will mean they stop making payments.

If you discover they had any other work or private pensions, you will need to contact the pension provider to find out how much the deceased had in their pension scheme.

If you were their spouse

You may be able to get pension payments from your husband, wife or civil partner’s pension or National Insurance contributions if you were married.

If they had a State Pension, you must be over the State Pension age to claim these payments. You can contact the Pension Service to check what you are eligible to claim.

If you reached the State Pension age before 6 April 2016, you will be able to claim any pension of your partners.

If you remarry before you reach State Pension age, you will not be eligible for these payments. If you reached the State Pension age before or after 6 April 2016, you’ll be eligible to inherit an extra payment on top of the pension.

Private Pensions

You may be eligible for private pensions, but this will depend on the pension scheme. You should contact the pension scheme to find out as this will be based on individual circumstances. These payments will likely be subject to tax.

Lump sums

Some pension providers may pay a lump sum after a person has died. This will be from a defined benefit pension scheme and will be paid to one specific individual.

This usually applies within a guarantee period (typically five to 10 years), with the amount paid equal to the value of the pension payments that are due to be paid between the individual’s death and the end of the defined guarantee period.

Payments of this amount often also depend on if the deceased nominated a beneficiary, naming who they wanted to receive the payment.

If you haven’t done this yet and are wondering about how your own pension might be passed on in the event of your death you should seek advice now.

If you need advice on related matters, contact us today.

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