What Happens to an LGPS Pension When Someone Dies?

What happens to an LGPS pension when someone dies?

1LGPS death benefits bypass probate — they are paid at the administering authority's discretion to nominated beneficiaries or dependants
2A death grant (typically three times pensionable pay for active members) plus a survivor's pension are the main benefits
3The nomination form (expression of wishes) is critical — the administering authority considers it but is not legally bound
4Death grants paid before age 75 are normally tax-free; after 75, the recipient pays income tax at their marginal rate
5From April 2027, LGPS pension funds may be brought within the scope of inheritance tax — a significant change for local authority employees

The Local Government Pension Scheme (LGPS) is one of the largest public sector pension schemes in the UK, covering council employees, school support staff, and other local authority workers in England and Wales. When an LGPS member dies, their family can claim a death grant and an ongoing survivor's pension. These benefits are held outside the estate and do not normally require probate.

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Does an LGPS Pension Require Probate?

In most cases, no. LGPS death benefits are held within a discretionary trust structure administered by the relevant local authority pension fund. Because the deceased had no absolute right to direct payment, the funds fall outside the estate. The administering authority can pay the death grant directly to a nominated beneficiary without a Grant of Probate.

If there is no nomination and no eligible dependants, the death grant may be paid to the estate. In that case, you may need to apply for probate before the funds can be distributed.

What Death Benefits Does the LGPS Pay?

Death Grant (Lump Sum)

Active members (in service): three times the member's assumed pensionable pay at date of death
Deferred members (left local authority work, not yet retired): a lump sum based on the deferred pension value (typically five times the deferred pension)
Retired members: if a member dies within ten years of retirement, an amount equivalent to the balance of ten years' pension payments may be payable

Survivor's Pension

A surviving spouse, civil partner, or eligible cohabiting partner receives an ongoing survivor's pension — typically around a third to half of the member's pension entitlement. This is paid for life and is subject to income tax. Eligible children receive a children's pension until age 18 (or 23 if in full-time education).

Cohabiting partners must generally have been living together for at least two years and satisfy a financial dependency test to be eligible for the survivor's pension. Contact your local LGPS administering authority for the specific rules that apply.

How to Claim LGPS Death Benefits

LGPS is administered locally, so you will need to contact the pension fund for the local authority where the deceased was employed. For example, a former Birmingham City Council employee would contact the West Midlands Pension Fund; a former Surrey County Council worker would contact the Surrey Pension Fund.

Identify the administering authority. Check the deceased's pension statements or payslips. You can also use the government's Pension Tracing Service or visit lgpsmember.org for a directory.
Notify the fund promptly. Contact the bereavement team as soon as possible. They will guide you through the process.
Provide a certified copy of the death certificate and any other documents requested, such as a marriage certificate or proof of cohabitation.
Complete the claim forms. The fund will send you the relevant paperwork for both the death grant and any survivor's pension.

The Nomination Form: Why It Matters

LGPS members can complete a nomination form (expression of wishes) to tell the administering authority who they would like to receive the death grant. This is an important document — the authority will consider it carefully when deciding who to pay.

However, the authority is not legally bound by the nomination. The discretionary structure is what keeps the funds outside the estate for tax purposes. In practice, valid nominations are almost always followed. Issues arise when the form is out of date — for example, if it names a former spouse or a beneficiary who has since died.

The survivor's pension is not affected by the nomination form — it is paid automatically to an eligible spouse, civil partner, or qualifying cohabiting partner under the LGPS rules.

Tax on LGPS Death Benefits

Death before age 75: The death grant is normally paid free of income tax. The survivor's pension is taxable as income.
Death at age 75 or over: The death grant is taxed as income for the recipient at their marginal rate (20%, 40%, or 45%). The survivor's pension also remains taxable.

For the latest guidance, see GOV.UK's page on tax on pension death benefits.

IHT and LGPS Pensions From April 2027

Currently, LGPS death benefits sit outside the estate and are not subject to inheritance tax. From 6 April 2027, proposed changes would bring unspent pension funds — including defined benefit schemes like LGPS — within the scope of inheritance tax.

This is a significant change, particularly for members with long service and high pension entitlements. Read our detailed guide to pensions and inheritance tax from April 2027, and review the inheritance tax rules for 2026/27 to understand the current position.

If There Is No Nomination Form

If there is no nomination form on file, the administering authority will exercise discretion. The death grant will usually be paid to the surviving spouse or civil partner. Where there is no eligible spouse and no dependants, the grant may be paid to the estate, making it part of the probate and estate administration process.

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