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NEST (National Employment Savings Trust) is a workplace pension scheme set up by the government to support auto-enrolment. It is a defined contribution (DC) scheme — members build up a pot of money over their working life. When a NEST member dies, the value of their pot can be paid to their nominated beneficiary or next of kin. NEST pension funds fall outside the estate and do not normally require probate.
In most cases, no. NEST is set up as a discretionary trust. The trustees have the power to pay the death benefit directly to the nominated beneficiary without the need for a Grant of Probate. The funds sit outside the estate because the member had no absolute right to direct who received them.
However, if there is no nomination and NEST cannot identify a suitable beneficiary, the funds may be paid to the estate. In that case, probate may be required before the funds can be distributed. See our guide on the probate threshold to understand when probate is triggered.
NEST is a defined contribution scheme, so there is no defined lump sum formula — the death benefit is the full value of the member's pension pot at the date of death, including all contributions and investment growth.
NEST does not pay an ongoing survivor's pension — the death benefit is paid as a lump sum only. There is no minimum or maximum to the amount; it is simply whatever the pot is worth when the member dies.
Some employers also provide a separate death-in-service benefit — this is paid independently and is not part of the NEST pension pot. Check with the employer's HR department if you think this may apply.
NEST aim to process bereavement claims promptly once all required documentation is received. Complex cases involving discretion may take a little longer.
NEST allows members to nominate a beneficiary through their online account. This nomination of beneficiary form tells the NEST trustees who the member would like to receive the pension pot.
The trustees will consider the nomination carefully but are not legally bound by it — this is what keeps the pot outside the estate for IHT purposes. In practice, NEST almost always pays to the nominated beneficiary where a valid nomination exists. Problems arise when:
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Members should keep their nomination up to date — it takes just a few minutes online. If you are dealing with the estate of someone who had a NEST pension and believe the nomination may be out of date, contact NEST directly and explain the circumstances.
For detailed guidance, see GOV.UK's page on tax on pension death benefits.
Currently, NEST pension pots fall outside the estate and are not liable to inheritance tax. This is set to change. From 6 April 2027, the government proposes to bring unspent pension funds — including DC pots like NEST — within the scope of inheritance tax. This means the value of the NEST pot at death may be added to the estate value when calculating whether IHT is due.
This is a significant change, particularly for those with larger NEST pots or whose estate is already near the nil-rate band threshold. Read our detailed guide to pensions and inheritance tax from April 2027 for a full explanation of what is changing.
Understanding inheritance tax basics and the current IHT rules for 2026/27 will help you assess the potential impact.
If the deceased had no nomination of beneficiary registered with NEST, the trustees will exercise discretion. They will typically seek to identify any surviving spouse, civil partner, or financially dependent person. If no suitable beneficiary can be identified, NEST may pay the fund to the estate.
If the pot is paid to the estate, it becomes part of the assets for probate and estate administration purposes and may be subject to inheritance tax.
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