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Scottish Widows is one of the UK's leading pension providers, part of the Lloyds Banking Group. It offers personal pensions, workplace pensions, and SIPPs to millions of customers. When a Scottish Widows pension holder dies, the fund value can be paid to a nominated beneficiary or eligible dependant. These funds sit outside the estate and do not normally require probate.
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In most cases, no. Scottish Widows pension funds are held in a discretionary trust, meaning they fall outside the deceased's estate. Scottish Widows can pay the fund value directly to the nominated beneficiary without requiring a Grant of Probate.
If there is no nomination and Scottish Widows cannot identify an appropriate beneficiary, the fund may be paid to the estate. In that case, probate may be required before the funds are distributed.
The death benefit is the full value of the pension fund at the date of death. For defined contribution pensions and SIPPs, this is the current market value of the investments held in the policy. Scottish Widows may offer beneficiaries the following options:
The options available will depend on the specific policy type. Scottish Widows will explain what is available when you contact their bereavement team.
Some Scottish Widows pension policies (particularly older with-profits or endowment-style policies) may also include a life assurance component. Check the original policy documents to see what is covered.
Scottish Widows asks pension holders to complete an expression of wishes form (nomination of beneficiary). This tells the trustees who the member would like to receive the fund. The trustees consider the nomination carefully, but retain discretion — this is what keeps the fund outside the estate for IHT purposes.
In practice, Scottish Widows almost always follows a valid, current expression of wishes. Problems occur when the form is outdated or missing. Members should review and update their nomination after any significant life event such as marriage, divorce, or the birth of a child.
See GOV.UK for the latest guidance on tax on pension death benefits.
Currently, Scottish Widows pension funds fall outside the estate and are not liable to inheritance tax. From 6 April 2027, the government proposes to bring unspent pension funds within the scope of IHT. This means the fund value at death may be added to the estate when calculating whether IHT is due.
Read our detailed guide to pensions and inheritance tax from April 2027 and the inheritance tax rules for 2026/27.
If no expression of wishes is on file, Scottish Widows will use their discretion, typically considering whether there is a surviving spouse, civil partner, or financially dependent person. If no suitable beneficiary is found, the fund may be paid to the estate, which then becomes subject to the probate and estate administration process.
From April 2027, unused pension funds will be subject to inheritance tax. Learn what's changing and how it affects bereaved families.
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