When you die, most schemes, will provide your spouse or civil partner with a pension. If you don’t have a spouse or civil partner, your scheme may provide a pension to someone who was financially dependent on you. If we pay a pension to any of these people, their pension may also increase each year in line with inflation.
Please get in touch with the Isio administration team to find out more.
Please click here if you want to report the death of a member of one of the pension schemes we administer.
If you have money left in income drawdown
If you die with your money in income drawdown, your spouse, partner or dependants can do one of three things. They can:
- Stay in income drawdown which is taxed as income.
- Buy an annuity which is taxed as income.
- Take the money in cash which is currently subject to a tax charge at the beneficiary's marginal rate.
There will normally be no inheritance tax to pay.
If you have an annuity
If you chose a guaranteed period and die within this period, then the annuity will continue to be paid until the end of the guaranteed period.
If you bought a joint life annuity the annuity, payments will continue to be paid to the second person, at the level you chose, until they die.
In all other cases, your money dies with you so no further payments are made.
Read more about passing on your pension and tax,
What happens to your State Pension?
Your basic State Pension is paid only to you and can’t be passed on to someone else when you die. If you have contributed towards an additional State Pension, your spouse or civil partner may get some of this.
If your spouse or civil partner is over the State Pension age when you die, they may be able to increase their basic State Pension by using your qualifying years entitlement. That is, as long as they don’t already get a full pension.
If your spouse or civil partner is under the State Pension age when you die, any State Pension based on your qualifying years entitlement will be added to their State Pension when they claim it. For this to happen, they can’t have remarried or formed a new civil partnership by the time they reach State Pension age.
If you have deferred your State Pension and you die, your spouse or civil partner may be able to claim an additional State Pension or a lump sum.
Read more about what happens to your State Pension on death.
Useful links
Pension Scams: ScamSmart - Avoid investment and pension scams | FCA
MoneyHelper: Free and impartial help with money, backed by the government | MoneyHelper
State Pension: Find out more about the State Pension | GOV.UK
Pension Tracing Service: Use this service to find contact details to search for a lost pension - GOV.UK
Pensions Ombudsman: Homepage | The Pensions Ombudsman (pensions-ombudsman.org.uk)
The Pensions Regulator: Workplace pensions law - auto enrolment | The Pensions Regulator