What Happens to an NHS Pension When Someone Dies?

What happens to an NHS pension when someone dies?

1NHS pension death benefits almost always bypass probate — they are paid directly by NHS Pensions to nominated beneficiaries at the scheme trustee's discretion
2A lump sum death grant of two times pensionable pay (or a set amount for retired members) is usually payable, plus a dependant's pension for a surviving spouse, civil partner or eligible dependant
3The nomination form (expression of wishes) is critical — trustees will consider it, but are not legally bound by it
4If the member died before age 75, lump sum benefits are usually tax-free; if after 75, the recipient pays income tax at their marginal rate
5From April 2027, pension funds will come within the scope of IHT — but as a DB scheme, the NHS Pension pays lump sums and dependant's pensions, not unspent DC pots; how the new rules apply to DB death benefits is still subject to HMRC guidance

The NHS Pension Scheme is one of the largest public sector pension schemes in the UK, covering doctors, nurses, and other NHS staff. When a member dies, the scheme pays out a death grant and, in many cases, an ongoing dependant's pension. These benefits are paid outside the estate and generally do not require probate.

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Does an NHS Pension Require Probate?

In most cases, no — an NHS pension does not require probate. NHS pension death benefits are held in a discretionary trust. This means they sit outside the deceased's estate and are paid directly by NHS Pensions to the nominated beneficiary or dependants. The Grant of Probate (or Letters of Administration) is not normally needed to release these funds.

The exception is where there is no valid nomination and no eligible dependants. In that situation, NHS Pensions may pay the lump sum death grant to the estate, in which case probate may be required before the funds can be distributed. This is unusual but does happen, particularly where the member was unmarried and had not updated their nomination form.

What Death Benefits Does the NHS Pension Pay?

The NHS Pension Scheme (covering the 1995, 2008, and 2015 sections) pays several types of death benefit:

Death Grant (Lump Sum)

Active members (still working): typically twice the member's pensionable pay at the date of death
Deferred members (left NHS but not yet retired): a lump sum based on the deferred pension value
Retired members already drawing pension: a residual lump sum may be payable if the member dies within five years of retirement (the "five-year guarantee")

Dependant's Pension

A surviving spouse, civil partner, or eligible dependant may be entitled to an ongoing pension. For most NHS Pension Scheme members, this is roughly half of the member's pension entitlement. This pension is paid for life and is subject to income tax for the recipient.

Children's Pension

Eligible children (typically under 23 and in full-time education, or disabled dependants) may also receive a children's pension, usually around a quarter of the member's pension.

How to Claim NHS Pension Death Benefits

The process for claiming NHS pension death benefits is managed by NHS Pensions (administered by NHS Business Services Authority). Here is what to do:

Contact NHS Pensions promptly. Ring 0300 330 1346 or write to NHS Pensions at PO Box 2269, Bolton, BL6 9JS. Inform them of the date of death and the member's NHS Pensions reference number if you have it.
Provide a certified copy of the death certificate. NHS Pensions will ask for this before processing any claim.
Complete a claim form. NHS Pensions will send you the relevant forms. You will need to provide details of your relationship to the deceased and your financial situation if claiming as a dependant.
Allow time for processing. NHS Pensions aim to process claims within 30 days of receiving all required documentation, though complex cases may take longer.

If you are unsure whether your loved one was a member of the NHS Pension Scheme, check any payslips, pension statements, or employment correspondence. You can also check with their employer or use the government's Pension Tracing Service.

The Nomination Form: Why It Matters

The NHS Pension Scheme asks members to complete a nomination of beneficiary form (sometimes called an expression of wishes). This tells the trustees who the member would like to receive the death grant.

Trustees will consider the nomination but are not legally bound by it. This is intentional — it keeps the funds outside the estate for IHT purposes. However, in practice, trustees follow the nominated beneficiary in the vast majority of cases, provided the nomination is current and the beneficiary is still alive.

What to check: If you are dealing with an NHS employee's estate, ask NHS Pensions whether a nomination form is on file. If the member did not update their nomination after a major life event (marriage, divorce, bereavement of a named beneficiary), the trustees may exercise discretion and pay to someone other than the original nominee.

The dependant's pension is not subject to the nomination form — it is paid automatically to an eligible spouse, civil partner, or dependant under the scheme rules.

Tax on NHS Pension Death Benefits

The tax treatment of NHS pension death benefits depends on the member's age at death:

Death before age 75: The lump sum death grant is usually paid tax-free, provided it is within the available lump sum allowance. Recipients of the dependant's pension will pay income tax on that pension income.
Death at age 75 or over: The lump sum death grant is taxed as income for the recipient at their marginal rate (20%, 40%, or 45%).

NHS Pensions will notify recipients of the tax position when making payment. For current guidance on pension death benefit taxation, see GOV.UK.

IHT and NHS Pensions From April 2027

Currently, NHS pension death benefits fall outside the estate and are not subject to inheritance tax. The government has announced that from 6 April 2027, pension funds will be brought within the scope of inheritance tax — but the NHS Pension Scheme is a defined benefit (DB) scheme, not a defined contribution (DC) pot.

The April 2027 rules primarily target unspent DC pension pots. The NHS Pension Scheme pays a lump sum death grant and an ongoing dependant's pension — it does not hold a pot of accumulated funds in the same way as a SIPP or workplace DC scheme. How the new rules will apply to DB death grants and survivor pensions is still subject to HMRC guidance. For deaths before April 2027, the current favourable rules apply. Read our guide to pension IHT changes from April 2027 for the latest position.

Families of NHS workers with larger pension entitlements should keep this developing area under review and may wish to take independent advice. Our inheritance tax guide for 2026/27 covers the current rules in full.

If There Is No Nomination Form

If your loved one did not complete a nomination form, NHS Pensions will exercise discretion. They will look at the member's circumstances — relationships, financial dependency, and any other information provided — and decide who is the most appropriate person to receive the death grant.

In practice, the lump sum will usually be paid to a surviving spouse or civil partner. If there is no spouse and no dependants, NHS Pensions may pay the death grant to the estate, at which point it becomes subject to the probate process and the terms of the will (or intestacy rules if there is no will).

If you are in this situation, contact NHS Pensions as soon as possible and explain the circumstances. They will guide you through what information they need.

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