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What happens to the money in my pension if I die?

If you die before you are 75 and you haven't taken any benefits, such as tax-free cash from your pension, the money will usually be paid out as a lump sum to your nominated beneficiaries. Alternatively, the money can be used to provide a tax-free income for them, either as drawdown or as an annuity.

If you have used the money in your pension to buy an annuity before you die, you’ll only be able to pass on guaranteed benefits to your beneficiaries. For example, some annuities guarantee to pay your surviving spouse 50% of the income you were receiving.

If you are 75 or over when you die, the same benefits are available, but death benefit payments will not be tax-free.