Farra is a death administration assistant for UK families. Get step-by-step guidance for registering a death, applying for probate, notifying banks, and managing bereavement admin. From essential documents to practical checklists, Farra simplifies estate paperwork and funeral-related tasks so you can focus on what matters.
This guide has not been checked against its sources
We re-checked our most-read guides against GOV.UK and the other official sources in September 2026. This one was not among them, so nobody has confirmed its figures, deadlines or process steps since it was written. Treat it as a starting point and confirm anything that matters on GOV.UK before you act on it.
The People's Pension is one of the UK's largest workplace pension providers, used by millions of employees across many sectors. It is a defined contribution (DC) scheme — members and their employers contribute to a pot that grows over time. When a member dies, the value of that pot can be paid to their nominated beneficiary or next of kin. These funds sit outside the estate and do not normally require probate.
In most cases, no. The People's Pension is a master trust, and the trustee has a genuine discretion over who receives the pot. It can pay a beneficiary directly without a grant of probate. The pot falls outside the estate because the member had no absolute right to direct payment — though, as set out below, that stops keeping it out of the inheritance tax net on 6 April 2027.
If there is no nomination and The People's Pension cannot identify a suitable beneficiary, the funds may be paid to the estate. In that case, probate may be needed before the funds are released.
The death benefit is the full value of the member's pension pot at the date of death — including all contributions from the member, employer, and government (tax relief), plus any investment returns. There is no separate formula — the pot is simply worth whatever it is at the time of death.
It is a defined contribution scheme, so there is no survivor's pension of the kind a final salary scheme pays. Ask The People's Pension what payment options are open to the beneficiary in the particular case rather than assuming a lump sum is the only one.
Some employers may provide a separate death-in-service benefit alongside The People's Pension. This is a separate payment made by the employer's group life insurance policy, not part of the pension pot.
Members of The People's Pension can nominate a beneficiary through their online account. This tells the trustee who the member would like to receive the pot. The trustee considers it carefully but retains discretion and is not legally required to follow it.
That discretion is what currently keeps the pot outside the estate for inheritance tax. It will not do so after 5 April 2027: HMRC's policy paper says the change applies "regardless of whether the pension scheme administrators or scheme trustees have discretion over the payment of any death benefits".
Members can log in and check or update the nomination — it takes only a few minutes and saves a bereaved family a great deal of difficulty when the form is out of date or was never completed.
The People's Pension will provide information on the tax position when making the payment. For the full picture, see GOV.UK's guidance on tax on a private pension you inherit.
From 6 April 2027 most unused pension funds and death benefits come into the estate for inheritance tax, and a defined contribution pot like this one is squarely within it. HMRC's policy paper of 26 November 2025 confirms the change applies whether or not the trustee has discretion, so the trustee's discretion will no longer keep the pot outside the estate.
The spouse, civil partner and charity exemptions are kept, so a pot passing to a surviving spouse or civil partner remains exempt. Personal representatives, not scheme administrators, are liable for reporting and paying any inheritance tax due, and can direct a scheme to withhold 50% of the benefit for up to 15 months while that is settled. Read our guide to pensions and inheritance tax from April 2027 for a full explanation.
If there is no nomination on record, the trustee uses its discretion, looking at who was financially dependent on the deceased. If no suitable beneficiary is found, the pot may be paid to the estate, making it subject to the probate and estate administration process.