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.
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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.
Some older defined benefit (final salary) pension schemes have rules that direct the death benefit to the deceased's estate if there is no valid dependant and no nomination on file. In that scenario, the death benefit becomes an estate asset and goes through probate. This is uncommon with modern schemes but worth checking for older occupational pensions.
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.
This is a critical change for anyone administering an estate in 2026 or planning for the future. From April 2027, unspent defined contribution pension funds will be brought into the taxable estate for inheritance tax purposes. This is a major reversal of the previous position.
Under the current rules (until April 2027), DC pension death benefits are generally free of IHT because they pass outside the estate. After April 2027, the pension fund value will be included in the gross estate when calculating IHT, meaning it could be subject to 40% tax above the nil-rate band (currently £325,000, plus up to £175,000 residence nil-rate band where applicable).
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.
The service holds contact details for over 200,000 pension schemes. You provide the name of a former employer or pension provider, and the service provides contact details so you can make enquiries. It does not confirm whether the deceased had a pension with that provider — you need to contact the provider directly to establish that.
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 April 2027, DC pension values will need to be reported on the IHT return even though the pension passes outside probate. The precise mechanism for this is still being finalised by HMRC. Executors dealing with estates that include significant pension funds should seek advice from a probate solicitor or tax adviser.
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 some older schemes can direct the lump sum to the estate if there is no qualifying dependant. Contact the pension 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.
The trustees will still pay out the death benefit — they exercise their full discretion. They will usually look for a surviving spouse or civil partner, then dependent children. The process takes longer without a nomination because the trustees must conduct their own investigation. It is strongly advisable to keep the expression of wishes form up to date, especially after major life events such as marriage, divorce, or having children.
Yes. From April 2027, unspent defined contribution pension funds will be brought into the taxable estate for IHT purposes. This means they will be counted when calculating whether the estate exceeds the nil-rate band (£325,000 plus RNRB of up to £175,000 where applicable). The death benefit will still pass outside probate in most cases, but the IHT liability will need to be coordinated between the pension trustees and the executor. Full details are in our pensions and IHT 2027 guide.
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