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What happens to my pension when I die?

Nobody likes thinking about what happens after they die. But it’s important to tell Nest who you would like to inherit your pension pot, to make sure it goes where you want, in the easiest possible way.

Who should inherit your pension if you die?

It's important to let us know who you would like to inherit your pension pot. You could choose one individual or several people, a good cause or any combination of these. 

Who you select is called your beneficiary.

You have two choices when telling Nest how to pay a beneficiary and this will affect how we make the payment.

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.

Find out how to make a nomination.

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.

Make an expression of wish

  • We will take your wishes into account when deciding who we pay your pension pot to
  • We can also consider any changes to your personal circumstances before making a payment
  • Your Nest pension pot will not usually be considered for Inheritance Tax purposes
  • You can change your beneficiaries at any time
  • You will no longer be able to choose the option to ‘make a nomination’.

Find out how to make an expression of wish.

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 the Trustee decided to pay the benefits 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, Nest will obtain all the relevant information about John’s circumstances. This includes details of his current wife and all his children to aid the decision of whether the money should be paid to Sarah or not, in which case it will usually be paid to John's estate.
Nest could decide that in the circumstances the money should be added to his other possessions which form part of his estate, to be distributed accordingly. The money in the pot would usually be free from inheritance tax calculations.

What happens if you do nothing?

We'll normally have to pay your retirement 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.

How to manage your beneficiaries

Everyone is different. The right choice for you, will depend on your situation and preferences.

For more information to help you decide what’s right for you and to tell us about your beneficiaries, simply log into your online account, click on ‘Edit your profile’ and from this page select ‘Manage your beneficiaries’.

As your circumstances can easily change, it’s important to make sure your beneficiary details are always kept up to date.

Last updated: 10/20

Member help centre

Member help centre

It's important to keep your beneficiaries' details up to date if your circumstances change. Find out more information in our help centre.

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