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What happens to my pension
when I die?

Illustration of woman looking at smartphone

Nobody likes thinking about what happens after they die. But you’ve worked hard for the money in your pension pot, and you should tell us who you want to inherit it.

It will make it quicker and simpler to get your hard-earned money to the people you care about.

Whoever you'd like to inherit, you have two options to choose from. Everyone’s different and the right choice for you depends on your personal circumstances.

What happens to my pension when I die?

What options do I have?

You can choose an individual, several people, a good cause, or any combination of these to inherit your pension pot. Who you select is called your beneficiary.

You have two options when you tell us how to pay a beneficiary. Here’s a breakdown of the choices available to you.

Make an expression of wish

When you choose this option, we’ll take your wishes into account when deciding who we pay your pension pot to. If you make an expression of wish:

  • we will also consider any changes to your personal circumstances before making a payment
  • your pot won't usually be considered for inheritance tax, as it doesn't form part of your estate
  • You can change your beneficiaries at any time
  • You will no longer be able to make a nomination

John is married to Sarah. John has chosen the expression of wish option and has decided to leave all of his pot to Sarah.

Scenario one
John passes away and because he decided to make an expression of wish, his retirement pot was free from any inheritance tax.

In this scenario we decided to pay the benefits to Sarah, in line with John’s request.

Scenario two
John and Sarah get divorced. A few years later John gets married to Helen and they have a son, Arthur. If John dies without updating his beneficiaries, we will obtain all the relevant information about John’s circumstances. This includes details of his current wife and all his children. This will help us decide whether the money should be paid to Sarah or not.

In these circumstances under an expression of wish, we could decide to pay the money to Helen and Arthur, or even to John's estate to be distributed by the executor of his will. The money in the pot would usually be free from inheritance tax calculations.

Older woman looking at smartphone

How to make an expression of wish

You can set an expression of wish by logging in to your online Nest account and selecting 'Add beneficiary'.

Make a nomination

  • We will pay your pension pot only to who you tell us to
  • Your pension pot will usually form part of your estate for inheritance tax purposes
  • You can update your beneficiaries at any time
  • You can change to an ‘expression of wish’ at any time.

Bob is married to Mary and they have a daughter Kate. Bob has chosen the nominated beneficiary option and has decided to leave 50% of his pot to Mary and 50% of his pot to Kate.

Scenario One
Bob passes away before taking his money out of Nest. In this scenario the retirement pot was paid out to Mary and Kate because Bob chose to make them nominated beneficiaries. Also, because he chose to nominate beneficiaries the pot was included in the calculation of inheritance tax.

Scenario Two
Bob and Mary get divorced. A few years later Bob gets married to June and they have a son Harry. Bob dies without updating his nominated beneficiaries.

In this scenario the money will still be paid to his first wife Mary and their daughter Kate. His second wife June and their son Harry would receive nothing, because by choosing the nominated beneficiary option and then not keeping his beneficiaries up to date, the money will be paid to the beneficiaries originally named by Bob.

Man and woman sitting together talking

How to make a nomination

You can choose to make a nomination from your online Nest account. Simply log in and select 'Add beneficiary' to make your choice.

What if I don’t do anything?

In these circumstances, we'll normally have to pay your pot to whoever is appointed to look after your estate. If the pot is £5,000 or under, we may pay to one or more of your relatives.

Summary of all your options

Choosing an option

You can tell us about your beneficiaries in your online Nest account. Simply log in, select ‘Edit your profile’ and click on ‘Manage your beneficiaries’.

As your circumstances can easily change, it’s important you always keep your beneficiary details up to date.

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Understanding inheritance tax

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A guide to inheritance tax