Archive Website of the UK government

If you die before retirement – salary related schemes

If you have a salary related scheme, what happens to your pension fund will depend on whether you are:

• an 'active member' – you are still making contributions
• a 'deferred member' - you have stopped making contributions (for example, you have left the company) but have not transferred your fund to another scheme

Active members

Depending on your scheme's rules, a number of benefits may be payable, including:

• a return of all of your contributions, usually repaid without interest
• a tax-free lump sum of up to four times the salary you were getting at the time of your death
• a pension for your spouse, civil partner or another dependant – the amount will be stated in the scheme’s rules

These are maximum benefits, and many schemes pay lower amounts. Contact your scheme administrator to find out exactly what your scheme provides.

Most schemes provide benefits for your spouse or civil partner. The amount will be stated in the scheme’s rules, but is often half or two-thirds of what you would have got at pension age.

If you have a partner and are not legally married or in a civil partnership your scheme may not recognise them as a dependant. Contact your scheme to find out more.

Deferred members

If you are a deferred member, your dependants often have fewer rights to benefits than if you were an active member. This will depend on your scheme's rules.

Sometimes your dependants will only get a refund of the contributions you have paid, without interest. An income must be provided for your spouse or civil partner if both of the following apply:

• the scheme is providing benefits instead of the Additional State Pension
• you are married or in a civil partnership

Some schemes are more generous and pay up to two-thirds of your pension to your spouse or civil partner.

If you die before retirement - money purchase schemes

With money purchase schemes, the rules are usually the same whether you are an active or deferred member.

Your pension fund will be refunded to your chosen beneficiary or your estate. If the scheme is contracted-out of the Additional State Pension, some of the benefit will usually provide an income for your spouse or civil partner.

There will often be a lump sum benefit provided by insurance cover too. Schemes vary widely so you should check with your scheme administrator to find out exactly what your scheme provides.

More useful links

• What happens to your company pension when you die

Useful contacts

• Money, tax and benefits contacts