What Happens to a Hargreaves Lansdown SIPP When Someone Dies?

What happens to a Hargreaves Lansdown SIPP when someone dies?

1Hargreaves Lansdown SIPP death benefits bypass probate — the fund is paid at HL's discretion to the nominated beneficiary, not under the will
2The full SIPP fund value is payable; beneficiaries can choose a lump sum or HL inherited drawdown, keeping the funds invested
3The expression of wishes registered with HL is the key document — trustees have discretion but almost always follow a valid nomination
4If the SIPP holder died before age 75, all payouts are normally tax-free; if after 75, the recipient pays income tax at their marginal rate
5From April 2027, unspent SIPP funds including HL SIPPs will be brought within the scope of inheritance tax — a significant change

Hargreaves Lansdown (HL) is the UK's largest investment platform, with hundreds of thousands of SIPP (Self-Invested Personal Pension) holders. When an HL SIPP holder dies, the fund value can be passed to a nominated beneficiary in a tax-efficient way. SIPP funds fall outside the estate and do not normally require probate — but there are important choices to make.

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Does a Hargreaves Lansdown SIPP Require Probate?

In most cases, no. HL SIPPs are held within a discretionary trust structure. The SIPP trustees can pay the fund directly to the nominated beneficiary without a Grant of Probate, because the funds fall outside the deceased's estate.

If there is no nomination and HL cannot identify a suitable beneficiary, the SIPP may be paid to the estate. In that case, probate may be required before the funds are distributed.

What Death Benefits Does an HL SIPP Pay?

The death benefit is the full value of the SIPP fund at the date of death — including all investments (shares, funds, cash, bonds) held within the SIPP wrapper. HL offers beneficiaries two main options:

1. Lump Sum

The beneficiary can take the full fund value as a cash lump sum. If the SIPP holder died before age 75, this is normally tax-free. If the holder was 75 or over, the lump sum is subject to income tax at the recipient's marginal rate.

2. Inherited Drawdown

Alternatively, the beneficiary can transfer the SIPP into an inherited drawdown plan held with HL. This means the fund stays invested and the beneficiary can draw income from it flexibly over time. This is often more tax-efficient — particularly for inherited pots where the holder died before age 75, as withdrawals remain tax-free.

HL will present both options clearly when the beneficiary contacts them. The choice can have a significant impact on the long-term tax treatment, so some beneficiaries seek independent financial advice.

How to Claim HL SIPP Death Benefits

Contact HL's bereavement team. Call 0117 900 9000 or visit hl.co.uk/bereavement. HL has a dedicated team and a clear online process for notifying them of a death.
Provide a certified copy of the death certificate. HL may also ask for other documents such as proof of identity for the beneficiary.
HL will review the expression of wishes. If a valid nomination is registered, HL will contact the nominated beneficiary and explain the options available.
Choose lump sum or inherited drawdown and complete the relevant paperwork.

HL is generally well-regarded for its bereavement process and typically handles claims efficiently. Most straightforward cases are resolved within a few weeks.

The Nomination Form: Why It Matters

HL SIPP holders can register an expression of wishes (nomination of beneficiary) through their online HL account at any time. This tells the SIPP trustees who the holder would like to receive the fund.

The trustees consider the nomination carefully but retain discretion — maintaining the trust structure that keeps funds outside the estate for IHT purposes. In practice, HL almost always follows a valid expression of wishes. Multiple beneficiaries and percentage splits can be nominated.

HL SIPP holders should review their expression of wishes regularly — it is quick to do online and can save significant complication for bereaved families. Outdated nominations naming a former partner or deceased person are a common cause of delay and distress.

Tax on HL SIPP Death Benefits

Death before age 75: All payouts (lump sum or inherited drawdown withdrawals) are normally tax-free for the beneficiary. This applies regardless of whether the beneficiary is a spouse, child, or any other nominated person.
Death at age 75 or over: Lump sums and inherited drawdown withdrawals are taxed as income at the beneficiary's marginal rate. A beneficiary in a lower income tax bracket will pay less tax than a higher-rate taxpayer.

This is why the age-75 rule is so important for SIPP planning. See GOV.UK for the latest guidance on pension death benefit taxation.

IHT and HL SIPPs From April 2027

Currently, HL SIPP funds fall completely outside the estate and are not liable to inheritance tax. This is one of the biggest advantages of SIPPs as a wealth transfer vehicle — and it is set to change.

From 6 April 2027, the government proposes to bring unspent SIPP funds within the scope of inheritance tax. The fund value at death will be included when calculating the estate for IHT purposes. This is a significant change, particularly for those who have deliberately preserved their SIPP as a tax-efficient inheritance tool.

Read our detailed guide to pensions and inheritance tax from April 2027 for a full analysis of what is changing. Understanding the inheritance tax basics and the current IHT thresholds will help you assess the impact on your family.

If There Is No Nomination Form

If no expression of wishes is registered with HL, the trustees will use their discretion. They will typically seek to identify a surviving spouse, civil partner, or financially dependent person. If no suitable beneficiary is found, the SIPP funds may be paid to the estate.

If paid to the estate, the funds become subject to the probate process and will be distributed under the terms of the will or intestacy rules. They may also be subject to inheritance tax if the estate exceeds the nil-rate band.

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