Will anyone get your pensions after you die?

WHEN it comes to managing pensions, the focus is generally on how much you will receive, how best to manage private pensions as you progress towards retirement, and how you'll draw from your state and private pensions in the future.

- BY MARCUS LAWRENCE

What isn’t so commonly discussed is what happens to those pensions if you die.

They can be passed on, whether you've begun to draw from them or not, but it's important to understand how this can work, what the differences are between the different types of pension, and how you can get things in order so your wishes are fulfilled.

What happens to your state pension after you die?

The state pension is paid out to individuals aged 66 or over who have made at least 10 years of National Insurance (NI) contributions, with the full amount being made available to those who have paid 35 years’ worth of NI contributions.

When you reach pension age, you can choose to defer your payments and so receive larger ones at a later date.

Generally speaking, your state pension stops when you die and can’t be passed on. There are a few caveats, however, depending on whether you're eligible for the Additional State Pension, your spouse’s NI contributions, and whether you deferred your pension payouts upon reaching the state pension age (see the panel below).

For those not familiar, the Additional State Pension is paid out on top of the regular pension to men born before April 6, 1951, and to women born before April 6, 1953.

But as a rule of thumb, the state pension typically ends upon your death and cannot be claimed by your spouse or civil partner. This is because the state pension is tied to your own NI contributions.

What happens to private pensions when you die?

Private pensions work differently, and in many instances can be passed on to a beneficiary or beneficiaries.