What Is a Pension Beneficiary Nomination?
A pension beneficiary nomination is the process by which you tell your pension provider who you want to receive your pension benefits when you die. Unlike other assets you own, your pension does not automatically form part of your estate or follow the instructions in your will. Instead, it is held in trust by your pension scheme, and the scheme trustees have the final discretion over who receives the death benefits.
This is why completing a beneficiary nomination — also known as an expression of wish form — is one of the most important things you can do as a pension holder. Without it, the trustees must make their own decision about who receives your pension, which may not align with your wishes.
Despite the importance of this step, research consistently shows that a significant proportion of UK pension holders have either never completed a nomination form or have one that is out of date. This can lead to delays, disputes, and in some cases, your pension going to someone you would not have chosen.
How Pension Nominations Work
When you complete a beneficiary nomination form, you are making a formal request to the pension scheme trustees. You can typically nominate one or more individuals, specifying what percentage of the death benefit each person should receive. For example, you might nominate your spouse to receive 75% and your child to receive 25%.
The key legal point is that your nomination is technically an expression of wish rather than a binding instruction. Pension scheme trustees retain discretion over the payment of death benefits. However, in practice, trustees follow valid and up-to-date nominations in the overwhelming majority of cases. They would only depart from your wishes in exceptional circumstances, such as:
- Evidence of fraud or undue influence
- A court order (for example, following divorce proceedings)
- The nominated beneficiary predeceasing you and no alternative being named
- The nomination being so old that it clearly no longer reflects your current circumstances
Who Can You Nominate?
The range of people you can nominate depends on whether you have a defined contribution (DC) or defined benefit (DB) pension.
DC Pensions: Complete Flexibility
With a DC pension (including workplace pensions, personal pensions, SIPPs, and stakeholder pensions), you can nominate virtually anyone:
- Your spouse or civil partner
- Unmarried partner or cohabitant
- Children of any age
- Grandchildren
- Other relatives such as siblings, nieces, or nephews
- Friends or unrelated individuals
- A charity or trust
There are no dependency requirements for DC pension nominations. You are free to leave your pension to whomever you choose, in whatever proportions you decide.
DB Pensions: Scheme Rules Apply
Defined benefit pensions are more restrictive. The ongoing dependant's pension (typically 50% of yours) can usually only be paid to:
- Your legal spouse or civil partner
- A cohabiting partner who meets the scheme's definition of financial dependency
- Dependent children (usually until age 18 or 23 if in full-time education)
However, for lump sum death benefits (such as death-in-service payments), you may be able to nominate anyone. Check your scheme rules carefully, as these vary between employers.
| Pension Type | Who You Can Nominate | Key Limitation |
|---|---|---|
| DC pension (SIPP, workplace DC, personal pension) | Anyone — no restrictions | None — full flexibility |
| DB pension — lump sum death benefit | Usually anyone | Must follow scheme rules |
| DB pension — dependant's pension | Spouse, civil partner, dependent children | Cannot nominate non-dependants |
| State pension | Not applicable | Some inherited state pension rights for surviving spouses |
How to Complete a Nomination Form
The process for completing a pension beneficiary nomination is straightforward, though the exact steps vary between providers:
- Locate your pension provider's nomination form — this is usually available online through your pension account dashboard, or you can request a paper copy by phone or post
- Identify your beneficiaries — you will need their full legal names, dates of birth, and addresses. For DC pensions, you can also nominate a charity by providing its registered charity number
- Specify the split — indicate what percentage each beneficiary should receive. The total must add up to 100%
- Sign and submit — some providers accept digital submissions, while others require a physical signature
- Confirm receipt — always check that your provider has received and recorded your nomination. Request written confirmation
When to Update Your Nomination
Your pension nomination should be a living document that you review regularly. You should update it immediately after any of the following life events:
- Marriage or entering a civil partnership — you may want your new spouse to be your primary beneficiary
- Divorce or separation — if your ex-partner is still named on your nomination, they could receive your pension. Divorce does not automatically revoke a pension nomination
- Birth or adoption of a child — you may want to add children as beneficiaries or adjust the split
- Death of a nominated beneficiary — if a nominee dies before you, update your form to name an alternative
- Changing pension provider — when you transfer pensions or change jobs, you need to complete a new nomination with your new provider. Old nominations do not transfer
- Significant change in financial circumstances — for example, if a beneficiary no longer needs financial support
Even without a specific trigger event, it is good practice to review all your pension nominations at least every two to three years. Some advisers recommend an annual review as part of a broader financial health check.
Common Mistakes with Pension Nominations
There are several common errors that people make with pension beneficiary nominations. Avoiding these can save your family significant stress, delay, and potentially money:
- Never completing a nomination form — the single most common mistake. Without a nomination, trustees decide at their discretion
- Leaving an ex-partner as the nominee — divorce does not revoke your pension nomination. If your ex is still named, they could receive your pension
- Assuming your will covers your pension — it does not. Pensions are outside your estate and governed by separate nomination rules
- Only nominating one person with no backup — if your sole nominee predeceases you, the trustees must exercise discretion. Consider naming contingent beneficiaries
- Forgetting about old pensions — if you have multiple pension pots from different employers, each one needs its own up-to-date nomination
- Not telling your family — your beneficiaries need to know which pension providers to contact when you die. Keep a record of all your pensions and share it with trusted family members
For a deeper analysis of these pitfalls, see our guide on pension and will mistakes to avoid.
Nominations and Inheritance Tax
One of the key reasons pension nominations work the way they do is inheritance tax (IHT). Because pension death benefits are paid at the discretion of trustees from a trust, they currently sit outside your estate for IHT purposes. This means your pension is not counted when calculating whether your estate exceeds the £325,000 nil-rate band.
However, this is changing. From April 2027, the government plans to bring unused pension funds within the scope of IHT. This means the value of your pension at death will be added to your estate for IHT calculation purposes. The change will make pension nominations even more important, as the interaction between IHT, income tax on inherited pensions, and the structure of your nominations will become more complex.
Read our detailed guides on pensions and IHT from April 2027 and pension estate planning for strategies to prepare.
Tax on Death Benefits: The Age 75 Rule
For DC pensions, the tax treatment of death benefits depends on your age when you die:
| Age at Death | Lump Sum | Drawdown Income |
|---|---|---|
| Under 75 | Tax-free (within the lump sum and death benefit allowance) | Tax-free |
| 75 or over | Taxed at beneficiary's marginal income tax rate | Taxed at beneficiary's marginal income tax rate |
This age-75 distinction makes it particularly valuable to nominate beneficiaries for your DC pension, as passing it on before 75 can be completely tax-free. See our full guide on pension death benefits before and after age 75 for more detail.
Next Steps
If you have not already done so, complete a beneficiary nomination form for every pension you hold. If your nominations are more than two years old, review them now. Make sure your nominations align with your will and overall estate plan, and consider speaking to an FCA-regulated adviser if you have complex family arrangements or large pension pots.