What Happens to an Armed Forces Pension When Someone Dies?

What happens to an Armed Forces pension when someone dies?

1Armed Forces pension death benefits bypass probate — they are paid at Veterans UK's discretion to nominated beneficiaries or dependants
2A death gratuity (typically two to three times pensionable pay) plus a survivor's guaranteed income payment (GIP) are the main benefits payable
3The nomination form tells Veterans UK who should receive the lump sum — trustees have discretion but usually follow a valid nomination
4Death gratuities paid before age 75 are normally tax-free; after 75, the recipient pays income tax at their marginal rate
5From April 2027, pension funds will come within the scope of IHT — but as a DB scheme, the Armed Forces Pension pays lump sums and survivor's pensions, not unspent DC pots; how the new rules apply to DB death benefits is still subject to HMRC guidance

The Armed Forces Pension Scheme (AFPS) covers serving and retired members of the British Army, Royal Navy, and Royal Air Force. There are several scheme generations: AFPS 1975, AFPS 2005, and AFPS 2015. When a member dies, their family can claim a death gratuity and an ongoing survivor's pension (known as a Guaranteed Income Payment). These benefits are held outside the estate and generally do not require probate.

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Does an Armed Forces Pension Require Probate?

In most cases, no. Armed Forces pension death benefits are held within a discretionary trust administered by Veterans UK (part of the Ministry of Defence). Because the benefits fall outside the deceased's estate, Veterans UK can pay the death gratuity directly to the nominated beneficiary without a Grant of Probate.

Where there is no nomination and no eligible dependants, the gratuity may be paid to the estate. In that case, you may need to apply for probate before the funds are released.

What Death Benefits Does the Armed Forces Pension Pay?

Death Gratuity (Lump Sum)

AFPS 1975 — active service: typically a lump sum related to pensionable pay and reckonable service
AFPS 2005 — active service: three times the member's pensionable pay at the date of death
AFPS 2015 — active service: three times the member's pensionable earnings at the date of death
Deferred members: a lump sum based on the deferred pension value
Retired members: a residual amount may be payable depending on the scheme and when death occurs

Survivor's Guaranteed Income Payment (GIP)

A surviving spouse or civil partner (and, in some schemes, a nominated partner) is entitled to an ongoing Guaranteed Income Payment — typically around 50% to 62.5% of the member's pension. This is paid for life and is subject to income tax. Eligible children may also receive a pension until age 18 or 23.

Where a service person dies on active duty or as a result of service, enhanced benefits may be payable under the Armed Forces Compensation Scheme (AFCS) as well. Veterans UK can advise on entitlements.

How to Claim Armed Forces Pension Death Benefits

Contact Veterans UK. Call the Veterans UK Helpline on 0808 1914 218 (free from UK landlines and mobiles). For retired members, have the pensioner's service number and pension reference ready.
Provide a certified copy of the death certificate. Veterans UK will require this before processing any claim.
Complete the claim forms. Veterans UK will send you the appropriate paperwork. Spouses and civil partners claiming a survivor's GIP will need to provide their marriage or civil partnership certificate.
Enquire about the Armed Forces Compensation Scheme if the death was related to service — separate benefits may be available.

The Nomination Form: Why It Matters

Armed Forces Pension Scheme members are asked to complete a nomination form (expression of wishes) specifying who should receive the lump sum death gratuity. Veterans UK considers this nomination when making payment decisions, but retains discretion as required by the trust structure.

Service personnel should update their nomination form whenever their personal circumstances change — for example, after marriage, divorce, or the birth of a child. An outdated nomination can cause unnecessary delays and unexpected outcomes for bereaved families.

Tax on Armed Forces Pension Death Benefits

Death before age 75: The lump sum death gratuity is normally tax-free for the recipient. The survivor's GIP is taxable as income.
Death at age 75 or over: The lump sum is taxed as income for the recipient at their marginal rate. The survivor's GIP also remains taxable.

See GOV.UK for the latest guidance on tax on pension death benefits.

IHT and Armed Forces Pensions From April 2027

Currently, Armed Forces pension death benefits fall outside the estate and are not liable to inheritance tax. The government has announced that from 6 April 2027, pension funds will come within the scope of IHT — but the Armed Forces Pension Scheme is a defined benefit (DB) scheme, not a defined contribution (DC) pot.

The April 2027 changes primarily target unspent DC pension pots. The Armed Forces Pension Scheme pays a death gratuity lump sum and an ongoing Guaranteed Income Payment — it does not hold an accumulated pot in the way a SIPP or workplace DC scheme does. How the new rules will apply to DB death gratuities and survivor pensions is still subject to HMRC guidance. For deaths before April 2027, the current rules apply. Read our guide to pensions and inheritance tax from April 2027 and the inheritance tax guide for 2026/27.

If There Is No Nomination Form

If no nomination form is on file, Veterans UK will exercise discretion and typically pay the death gratuity to the surviving spouse or civil partner. If there is no surviving spouse and no eligible dependants, the gratuity may be paid to the estate, making it subject to the probate process and potentially inheritance tax.

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