Farra is a death administration assistant for UK families. Get step-by-step guidance for registering a death, applying for probate, notifying banks, and managing bereavement admin. From essential documents to practical checklists, Farra simplifies estate paperwork and funeral-related tasks so you can focus on what matters.
Most modern defined contribution (DC) pensions — personal pensions, SIPPs, and workplace money-purchase schemes — do not go through probate. They are held in discretionary trust by the pension provider's trustees, which means they sit entirely outside the deceased's legal estate. The trustees decide who receives the death benefit, and the money is paid directly to the chosen beneficiaries without needing a Grant of Probate. There are important exceptions, and from April 2027 the inheritance tax treatment of pensions changes significantly.
The key is the trust structure. When you join a pension scheme, you are not the outright owner of the fund in the same way you own a bank account or a house. The money is held on trust by the pension provider's trustee body. On death, the trustees have a legal duty to identify the appropriate beneficiaries and pay out the death benefit — they are not bound by the deceased's will.
Because the pension fund never formed part of the deceased's legal estate in the first place, it cannot be caught by the probate process. Executors do not have authority over pension death benefits. The pension provider deals directly with the trustees, who deal directly with the beneficiaries.
This is why pensions have long been used as an estate planning tool: assets held in pension wrappers have historically passed free of inheritance tax and outside the reach of probate. That position is changing from April 2027 — see below.
Most pension providers ask members to complete a nomination of beneficiaries or expression of wishes form. This tells the trustees who the member would like to receive the death benefit — typically a spouse, civil partner, children, or other named individuals.
Critically, this form is not legally binding on the trustees. The trustees must take it into account, but they retain discretion to pay the death benefit to any dependant or nominated person. In practice, most trustees follow the member's wishes unless there is a compelling reason not to — for example, where circumstances have changed significantly since the form was last updated.
Because the form is not binding, it does not affect the deceased's will or IHT return. Executors should check whether the pension provider has an expression of wishes form on file, and whether it is up to date.
If the deceased never completed an expression of wishes form, the trustees will still pay the death benefit — they will simply exercise their full discretion, typically favouring a surviving spouse or dependent children. However, the process takes longer and can be more stressful for grieving families.
Not all pension arrangements bypass probate. The following situations are the main exceptions:
If the deceased had purchased an annuity with a guarantee period (say, 10 years), and they died before the guarantee period expired, the remaining guaranteed payments may form part of the estate. The capital value of those future payments must be included on the IHT400 and will pass through probate. Check the annuity contract carefully.
Several defined benefit schemes direct the death benefit to the deceased's estate where there is no eligible dependant and no nomination on file. This is not a quirk of obscure old schemes: the NHS Pension Scheme says it is not a discretionary scheme and pays the lump sum to the estate in that situation, asking for a Grant of Probate or Letters of Administration for anything of £5,000 or more, and the Teachers' Pension Scheme issues the death grant to the estate on the same facts. Home Office guidance says the same for the police schemes. So do not assume a public sector pension bypasses probate — check the scheme rules.
Very occasionally, a pension is written with the death benefit payable to the legal personal representatives (i.e., the executor or administrator). If this is the case, the death benefit flows into the estate and must be declared on the probate application and IHT return.
If the deceased was already taking drawdown income from a DC pension at the time of death, whether the remaining fund bypasses probate depends on the scheme rules and whether a valid nomination is in place. In most cases it still bypasses probate, but check with the provider directly.
The State Pension does not pass to anyone on death — it is a personal entitlement that ends when the pensioner dies. There is no "pension pot" to inherit from the State Pension.
However, if the deceased was owed State Pension payments that had not yet been paid at the date of death (arrears), those arrears are a debt owed by the DWP to the estate. They must be claimed by the executor and will be included in the estate for probate and IHT purposes.
A surviving spouse or civil partner may in some circumstances inherit a proportion of the deceased's State Pension entitlement — this is separate from the estate and is claimed directly from the DWP.
From 6 April 2027, most unused pension funds and pension death benefits are brought into the value of the estate for inheritance tax. Under the current rules, DC pension death benefits are generally free of IHT because they pass outside the estate; after that date the fund value is included in the estate, so it can be taxed at 40% above the nil-rate band (£325,000, plus up to £175,000 residence nil-rate band where applicable).
The change is narrower than the headlines suggest, and two exclusions matter for anyone administering an estate. HMRC's policy paper of 26 November 2025 states that all death in service benefits payable from a registered pension scheme are excluded — discretionary and non-discretionary schemes alike — and so are dependants' scheme pensions from a defined benefit arrangement or a collective money purchase arrangement. The existing exemptions for death benefits passing to a surviving spouse or civil partner, and to registered charities, are kept. So a public sector death grant, or a survivor's pension from a final salary scheme, is not what the change is aimed at.
Personal representatives become liable for reporting and paying any inheritance tax due on the funds and death benefits that are in scope. Where they reasonably expect tax to be due, they can direct the pension scheme administrator to withhold 50% of the taxable benefits for up to 15 months from the date of death and pay the tax to HMRC before the rest is released to the beneficiaries.
Read our guide on pensions and inheritance tax from April 2027 for a full explanation of how the new rules will work and what executors need to do.
Note: the pension still passes outside probate even after April 2027 — the change is to IHT only, not to the legal probate process. Executors will need to declare the pension value on the IHT return even though they do not control the distribution.
Even though most pensions bypass probate, executors still have responsibilities:
See our estate administration checklist for a full list of tasks, including pension notifications.
If the deceased had multiple jobs over their lifetime, they may have accumulated pension benefits from several employers — some of which may have been forgotten or poorly documented. The government's free Pension Tracing Service can help.
You provide the name of a former employer or pension provider, and the service gives you contact details so you can make enquiries. GOV.UK is explicit that it "will not tell you whether you have a pension, or what its value is" — you need to contact the provider directly to establish that. You can also request contact details by phone on 0800 731 0175, Monday to Friday 10am to 3pm, or by post to The Pension Service, Post Handling Site A, Wolverhampton, WV98 1AF.
You can access the Pension Tracing Service at gov.uk/find-pension-contact-details. There is no charge to use it.
For estates that are taxable (above the nil-rate band) and where probate is required, the IHT400 form asks about pension rights. Currently, most DC pensions that bypass probate do not need to be declared on the IHT400 (because they are not estate assets), but annuities with unexpired guarantee periods and pension arrears must be included.
From 6 April 2027, in-scope pension values will need to be reported on the IHT return even though the pension passes outside probate. The mechanism is set out in HMRC's November 2025 policy paper: personal representatives are liable for reporting and paying, and can direct the scheme administrator to withhold 50% of the taxable benefits for up to 15 months and settle the tax before the balance is released. Death in service benefits from a registered scheme, and dependants' scheme pensions from a defined benefit arrangement, stay out of scope.
For a wider look at the errors executors make, see our guide to common probate mistakes.
Understanding which assets pass through probate and which do not is one of the first things an executor needs to establish. As well as pensions, the following assets often cause confusion:
In most cases, no. A Self-Invested Personal Pension (SIPP) is a defined contribution pension held in discretionary trust. On death, the trustees decide who receives the death benefit based on the member's expression of wishes — the fund does not form part of the legal estate and does not require probate. The exception is if the SIPP rules direct the death benefit to the estate, or if an annuity has been purchased with guarantee payments outstanding.
It depends on the type of scheme. A modern defined contribution (money purchase) workplace pension held in trust does not go through probate. A defined benefit (final salary) pension may have death benefits that bypass probate (typically a spouse's pension and a lump sum), but a number of schemes — including the NHS and Teachers' Pension Schemes — direct the lump sum to the estate if there is no qualifying dependant and no nomination. Contact the scheme administrator directly for the rules.
Most DC pensions are excluded from the legal estate for probate purposes because they are held in trust. However, the pension value may still be relevant: for IHT purposes (especially post-April 2027) and for means-testing if the deceased was receiving care. Always obtain written confirmation of the pension value from the provider for your estate records, even if it bypasses probate.
On a scheme where the decision is discretionary, the trustees or scheme administrator will still pay out the death benefit, using their full discretion. They will usually look for a surviving spouse or civil partner, then dependent children, and the process takes longer because they must conduct their own investigation. Not every scheme works that way: several public sector schemes, including the NHS Pension Scheme and the Teachers' Pension Scheme, pay the spouse or civil partner automatically where there is no nomination, and only fall back to the estate if there is nobody eligible.
Most, but not all. From 6 April 2027 most unused pension funds and death benefits are brought into the estate for IHT, so they are counted when working out whether the estate exceeds the nil-rate band (£325,000 plus RNRB of up to £175,000 where applicable). Death in service benefits payable from a registered pension scheme are excluded, as are dependants' scheme pensions from a defined benefit arrangement, and anything passing to a surviving spouse, civil partner or registered charity keeps its existing exemption. The death benefit still passes outside probate, but personal representatives are liable for reporting and paying the tax on whatever is in scope. Full details are in our pensions and IHT 2027 guide.