Death benefits

Pensions freedoms in 2015 introduced major changes to pension death benefit options and taxation. Here we provide some technical support to help you.

Watch our webinar

Justin Corliss, Senior Business Development Manager at Royal London, talks about:

  • Pension death benefit options available
  • Impact of pension freedoms on pension death benefits
  • Taxation of pension death benefits

 Pension death benefits – facts and planning presentation

Read our top five questions

  1. What can the ex-spouse/civil partner do with a pension credit?

    If the scheme does not allow the ex-spouse/civil partner to become a member, the transfer value can be paid to a personal pension. If the pension credit is coming from an occupational scheme, a Section 32 will also be an option.
    The value could also be transferred to a scheme the ex-spouse/civil partner is already a member of, if the rules of the receiving scheme allow.

  2. Is it possible to take tax free cash from a pension credit?
    If the pension credit originated from crystallised benefits such as an annuity, a DB pension in payment or funds in drawdown, it is not possible for the ex-spouse/civil partner to take any tax free cash.  This is called a disqualifying pension credit.

  3. Is it possible to apply a pension sharing order when you are not married or in a civil partnership?
    No.  Pension sharing is only an option on divorce.  It is not an option for unmarried couples or couples not in a civil partnership.

  4. When giving advice on a pension credit coming from a DB scheme where the only option is a transfer out, are the pension transfer permissions required?
    As the ex-spouse/civil partner is not giving up any benefits in the DB scheme, the pension transfer permissions are not required.

  5. Are there any pensions which can’t pay a pension credit to an ex-spouse/civil partner?
    Yes.  State pensions, pensions inherited on death including beneficiary drawdown or any pensions which already have an earmarking order as a result of a divorce.

Read our technical articles

Major changes to the tax charges that apply to benefits paid on the death of a pension scheme member took effect from 6 April 2015.  This article explains how the funds were treated prior to then.

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Last updated: 12 Feb 2019

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The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The firm is on the Financial Services Register, registration number 117672. It provides life assurance and pensions. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London, EC3V 0RL.