Final Salary Pension: What the Surviving Spouse Receives

Final salary pensions — formally known as defined benefit (DB) pensions — work very differently from the defined contribution (money purchase) pensions that are more common today. Rather than building up a pot of money, a final salary scheme promises a pension based on the member's salary and years of service. The death benefits from these schemes are similarly structured around promised payments rather than fund values, which means surviving spouses may receive a valuable income for life.

How defined benefit death benefits differ from defined contribution

Understanding the distinction between scheme types is essential:

• Defined contribution (DC) pension: Also called a money purchase pension. The member builds up a pot of money from contributions and investment growth. On death, the pot value is paid out as a lump sum to nominated beneficiaries.
• Defined benefit (DB) pension: Also called a final salary or career average pension. The scheme promises a specific income in retirement based on a formula (e.g. 1/60th of final salary per year of service). On death, the benefit for the surviving spouse is an ongoing pension income, not a lump sum pot value. There is no "pot" to inherit.

This distinction matters enormously. A DC pension of £200,000 would pay out £200,000 as a lump sum on death. A DB pension worth £200,000 in actuarial terms would instead pay an ongoing income to the surviving spouse — typically £5,000 to £8,000 a year for life, depending on the scheme's rules. Over a long retirement, this ongoing income can be far more valuable than a lump sum.

The typical survivor's pension: 50% or two-thirds

Most defined benefit pension schemes provide a survivor's pension (also called a dependant's pension or spouse's pension) to the surviving spouse or civil partner. The standard rate is typically 50% of the member's earned pension, though many schemes — particularly public sector schemes — pay a higher rate:

• NHS Pension Scheme: 37.5% of the member's pension for active members (higher for members who joined before certain dates)
• Teachers' Pension Scheme: 37.5% of the member's pension as the standard spouse's pension
• Civil Service (Principal Civil Service Pension Scheme): Spouse's pension equal to 37.5% to 50% depending on the section
• Local Government Pension Scheme: 50% of the member's pension as the standard survivor's pension
• Private sector DB schemes: Vary widely — some pay 50%, some pay 60%, some pay two-thirds. Check the scheme booklet or contact the administrator.

The survivor's pension is typically paid for the rest of the surviving spouse's life, and most modern schemes increase it annually in line with the Consumer Prices Index (CPI) or a similar inflation measure.

Lump sum death in service benefit versus the ongoing spouse's pension

Many defined benefit schemes provide two separate death benefits:

• Death in service lump sum: A one-off payment, typically two to four times the member's annual salary (or sometimes a multiple of the accrued pension). This is usually paid to the nominated beneficiaries under the scheme's discretion rules (similar to DC pension nomination forms — see our separate guide on pension death benefits and nomination forms).
• Ongoing spouse's / dependant's pension: A regular income paid to the surviving spouse (and sometimes to dependent children) for life. This is governed by the scheme rules and is automatic — no nomination is required for the spouse's pension.

These two benefits are separate and both may be payable. Contact the pension scheme administrator to confirm what benefits are available under the specific scheme rules.

Cohabiting partners and civil partners — who qualifies?

Most modern defined benefit schemes have updated their rules to include civil partners and, increasingly, cohabiting partners in the definition of dependant eligible for the survivor's pension. However, this is not universal:

• Married spouses: Always included in all DB schemes
• Civil partners: Included in all schemes post-2005 (when civil partnerships were introduced), and in most schemes for accrual periods before that date
• Cohabiting partners: Many modern schemes include cohabiting partners who can demonstrate financial interdependence and a settled domestic relationship. Older scheme rules may exclude cohabitants entirely — check the specific rules.
• Former spouses: Generally not included unless the divorce resulted in a pension sharing order (PODE) or an earmarking order that entitles the former spouse to benefits.

If you are a cohabiting partner and believe you may be entitled to a survivor's pension, contact the pension scheme administrator and ask them to confirm the scheme rules for cohabiting partners. Be prepared to provide evidence of your relationship and financial interdependence.

What happens if the deceased had not yet retired

Final salary pension death benefits differ depending on the member's status at the time of death:

• Active member: A member who was still employed and contributing to the scheme at the time of death. Death benefits are typically the most generous for active members, including a death in service lump sum (often 2 to 4 times salary) plus the spouse's pension.
• Deferred member: A member who left the employer and left the pension "frozen" in the scheme (also called a preserved pension). Death benefits for deferred members are typically more limited — usually the spouse's pension based on the deferred pension entitlement, but without the death in service lump sum.
• Pensioner member: A member who had already retired and was receiving their pension. Benefits for surviving spouses of pensioners are typically the spouse's pension (50% of what was being paid) and sometimes a lump sum if the member died within five years of retirement (a "pension guarantee period" payment).

Contact the pension scheme administrator as soon as possible after the death. They will ask for the death certificate, your relationship to the deceased, and details of any other dependants. The administrator will then confirm what benefits are payable and guide you through the claim process.