What benefits may be payable
Death might not be something you like to think about, but it is important you understand what will happen to your pension account when you die, and what you can do to make sure your money goes to the right place.
Depending on the choices you made when you accessed your pension account, there are different rules around what benefits may be payable when you die.
Generally, if you still have funds invested and are taking an income from them (i.e. with a flexi-access drawdown or encashment), then the remaining funds will be paid to your dependants free of any taxes, if you die before age 75.
If your death occurs after age 75, there will be tax to pay on the remaining proceeds at your dependants’ marginal income tax rate.
Please keep in mind that there are changes planned to the rules around Inheritance Tax. You can read more about those below.
If you have purchased an annuity, generally there is no payment to your dependants unless you included a dependant’s benefit or a guarantee period that had not expired before your death. Please speak to your annuity provider for more information in that instance.
Changes to Inheritance Tax (IHT) and pensions from April 2027
From 6 April 2027, most unused pension funds and lump sum death benefits will be included within the value of a person’s Estate for Inheritance Tax purposes. The detail of this change, including its implementation and operation, is still to be confirmed following a government consultation.
The Company will be monitoring the position and providing updates to members when the details are confirmed.
The Company are not authorised to provide you with financial advice. If you feel you require financial advice, please check the help and advice page for details.
You can find more information on the changes, including the full government consultation on the government website.
Have your say on who your death benefits should go to
If any death benefits are payable under the UPP rules, the UPP administrator, Fidelity, usually decides who they should go to.
To help make the decision, they ask that you complete an Expression of Wish, which lets them know who you would prefer the benefits to be paid to.
In your Expression of Wish you can nominate:
- An individual or several people, including family members or other significant people in your life
- Charities or good causes
- Other organisations such as a club(s)
For each nominated person or organisation, you need to confirm the proportion of your benefits that they should receive. The proportions should add up to 100%.
Fidelity do not have to follow your wishes (for example, the information may be very out of date), but it is an important piece of information for them to consider.
Making an Expression of Wish could also make the decision-making process much quicker and may prevent delays in any benefits being paid, which can have tax implications.
The easiest and quickest way to complete an Expression of Wish for your UPP death benefits is to go online and complete a form using either:
- the PlanViewer or
- under the ‘myPlan’ section on the Fidelity website
Click on ‘Profile and Settings’ then ‘My Beneficiaries’ It will only take a few minutes.
Alternatively, you can request an Expression of Wish form from the UPP administrator, Fidelity using their contact information, on the contact details page. Once complete, please return it to Fidelity using the address on the form.
You can complete a new Expression of Wish at any time and there is no limit on how many times you can update it.
Remember, a will does not currently cover your pension savings, so the only way to leave direct instructions for what you want to happen to your retirement balance is to make an Expression of Wish.
How to report a member's death
When you die, it may be up to your family or friends to report your death to the administrator, Fidelity, using the Bereavement Line 0800 414116.
The person dealing with your Estate will need to provide any necessary documents requested, such as a death certificate. Originals will be returned to them by recorded delivery.
Within five working days of this information being processed, Fidelity will contact your next of kin and/or anyone they know may be a potential beneficiary, through your Expression of Wish to explain what they may be entitled to and what they need to do next.
The Government’s Tell Us Once service will not work for your UPP benefits because the pension plan is not a government department. That means your next of kin, or your representatives, must contact Fidelity, even if they are using the Tell Us Once service for other organisations.