Death in service and your pension

Guidance about the benefits available if you die in NHS pensionable service, who they can be paid to and whether they are taxable.

Location: UK
Audience: All doctors
Last reviewed: 8 December 2021
Piggybank illustration

A lump sum is payable if you die whilst contributing to the NHS pension scheme. Additionally, depending on your circumstances, an ongoing adult dependent pension may be payable as well as an allowance for any eligible children (usually payable up to age 23).

The lump sum is payable to your spouse/registered/nominated partner automatically or you can nominate someone else to receive it.

If you have no spouse/registered/nominated partner and have not made a nomination, the benefit will be paid into your estate.

 

Am I covered for death in service benefits?

I'm a locum GP

If you work exclusively as a GP locum, you will only be covered for death in service benefits if you die whilst working and contributing to the scheme. Read more in our pensions guidance for locums.

I am bank staff

As with GP locums you will only be covered for death in service benefits if you die whilst working and contributing to the scheme.

I'm a secondary care doctor on authorised leave

If you choose to continue contributing to the scheme during your period of authorised leave then you will be covered for the death in service benefits for a period of up to two years (the maximum period of authorised leave available).

If you decide not to contribute then you will be considered a deferred member and be subject to a different level of benefits.

I'm on unpaid sickness absence

You are covered for death in service whilst still under a contract of employment despite not being able to pay contributions. Benefits will be calculated as if you had died in pensionable service on the day before your earnings ceased.

What lump sum is payable if you die in pensionable service?

A lump sum is payable if you die in service, no matter what section of the pension scheme you are in, or how long you have been in the scheme for.

I'm a secondary care doctor in the 1995 section

A lump sum payment of twice your actual annual pensionable pay is payable directly to your widow/widower/civil partner/nominated partner in the event of your death whilst still contributing to the NHS pension scheme. This is payable into your estate if you are unmarried or have not made a nomination.

I'm a secondary care doctor in the 2008 section

A lump sum payment of twice your actual reckonable pay is payable directly to your widow/widower/civil partner/nominated partner in the event of your death whilst still contributing to the NHS pension scheme.

This is payable into your estate if you are unmarried/have not made a nomination.

I'm a GP in the 1995/2008 section

A lump sum payment of twice your average uprated earnings is payable directly to your widow/widower/civil partner/nominated partner in the event of your death whilst still contributing to the NHS pension scheme.

This is payable into your estate if you are unmarried or have not made a nomination.

I'm in the 2015 scheme

A lump sum of twice your relevant earnings in the last 12 months or revalued relevant earnings in one of the last 10 years (if higher) is payable directly to your widow/widower/civil partner/nominated partner in the event of your death whilst still contributing to the NHS pension scheme.

This is payable into your estate if you are unmarried or have not made a nomination.

The above also applies if you have transitioned to the 2015 scheme from the 1995 or 2008 section.

I'm working part-time

The lump sum will be based on your pro-rated pensionable salary and not the whole-time equivalent.

I work in the NHS, but have opted out of the pension scheme

The lump sum payable will be based on the annual pension you would have received had you retired on the date of death as follows:

  • 1995 section: a lump sum of 3x your annual pension is payable
  • 2008 section: a lump sum of 2.25x your annual pension is payable
  • 2015 scheme: a lump sum of 2.025x your annual pension is payable.
I'm a mental health officer over 60 with maximum service

If you have not yet drawn your pension, the 1995 section death in service lump sum detailed above would be payable. This is even if you are not paying into the scheme as a result of reaching maximum service limits.

What tax is charged on the lump sum?

As a general guide, any amount paid as an NHS lump sum on death in service is:

  • not normally included in an inheritance tax assessment if a member is married or in a registered civil partnership and payment is made to the deceased member's legal spouse or registered civil partner as of right
  • subject to inheritance tax if the member is single or if it is paid to a nominee or a qualifying nominated partner.

In all circumstances, any lump sum must be paid within two years of the date that the scheme was first notified of the member’s death. After two years the lump sum will be subject to a tax charge of up to 45%.

If the payment causes you to exceed the lifetime allowance then the excess will be subject to a tax charge. Please refer to the lifetime allowance guidance for more information on the charges payable.

Your beneficiary is legally responsible for paying any lifetime allowance charge that may be due.

Nominating who gets your lump sum

I have a partner but do not want them to receive my lump sum

If you do not want the payment to go to your spouse or civil partner you can nominate another person(s) or institution to receive the payment. Alternatively, the payment can be shared between multiple parties.

A form will need to be completed should you wish to nominate another person(s) or institution to receive the death lump sum payment:

I have a partner but we're not married

If you are not married or in a registered partnership you can nominate your partner to receive the payment. A form should ideally be completed:

 

I don't have a partner and am not married

If you are not married or in a registered partnership and you have not nominated a qualifying partner to receive the payment, you can elect others to receive this payment. This includes children or one organisation (including a bank, trustee or firm of solicitors).

The payment will then be paid to the nominees automatically without waiting for grant of probate or letters of administration.

If no election is made, a payment will still be due and the money will be paid into your estate. It will potentially be subject to inheritance tax.

Qualifying for an adult dependent pension

I am married

A widow/widower/registered partner pension is payable in the event of your death in service, in addition to the death in service lump sum detailed above.

Since 1 April 2019, 1995 section benefits payable to a widower and registered civil partner, where death occurred after 5 December 2005, will be based on all service.

Deaths which occurred prior to that date will continue to have widower benefits based only on service from 6 April 1988 onwards.

I'm not married

In order to qualify for a partner pension your nominated partner needs to meet certain criteria, both at the time of the nomination and at the time of your death in service.

The criteria includes being in a mutually exclusive long term relationship (of at least two years) with financial dependency or interdependency. You will need to have been able to marry or enter a registered civil partnership had you wanted to. The validity of the nomination is tested at the time of death.

The form to nominate your unmarried partner to receive this benefit is available from the following agencies:

Whilst it is no longer a requirement to have completed a nomination form for an unmarried partner it is best practice to do so.

Nominated partners in the 1995 section will continue to have benefits based only on service since 6 April 1988.

 

 

The pension your adult dependent will receive short term

A short term pension, payable for six months only, may be the only ongoing pension paid if you have been in the NHS pension scheme for less than two years and you die under your normal pension age.

This is paid directly to your widow/widower/registered/ nominated partner by your employer or pensions agency on receipt of the death certificate.

I'm in the 1995 section

For the first six months, a payment equal to your actual rate of pay (for secondary care doctors) or the rate of pensionable earnings during the last complete quarter before death (for GPs) is payable.

I'm in the 2008 section

For the first six months, a payment equal to your actual reckonable rate of pay (for secondary care doctors) or the rate of pensionable earnings during the last complete quarter before death (for GPs) is payable.

I'm in the 2015 scheme

For the first six months, a payment equal to your rate of pensionable earnings (for GPs this is based on the rate of pensionable earnings during the last complete quarter before death) is payable.

I transitioned into the 2015 scheme

If you have transitioned to the 2015 scheme from the 1995/2008 section, benefits will only be payable in relation to your service/earnings in the 2015 scheme.

The death in service payment looks at earnings in the 2015 scheme only.

1995/2008 section benefits are only payable in respect of the ongoing long term dependents pension but will be payable without any enhancement.

The pension your adult dependent will receive long term

The following outlines the benefits your adult dependent will receive after the initial short term pension.

If your service has been for a total of less than two calendar years, there is no further ongoing pension payable to an adult dependent after the short term pension detailed above.

An exception to this is if you die over the normal pension age of the scheme you are a member of.

The long term pension is paid directly to your widow/widower/registered partner/nominated partner by the pensions agency on receipt of the appropriate application form. The form is available from your employer.

The long term pension, for members with service since 1 April 2008, is payable for life regardless of any remarriage or cohabitation the adult dependent may enter into.

I'm in the 2015 scheme

If you die under your state pension age, the long term pension is based on 33.75% of the tier 2 ill health retirement pension that you would have received had you retired on health grounds as at the date of death.

A tier 2 pension is usually enhanced by half of your prospective service until your state pension age, so the pension will be based on an enhanced amount.

If you are over your state pension age, the 'long term' pension will be based on your actual pension with no enhancement.

I'm in the 2008 section

If you die aged under 65, the long term pension is based on 37.5% of the tier 2 ill health retirement pension that you would have received had you retired on health grounds as at the date of death.

A tier 2 pension is usually enhanced by two thirds of your prospective service until your normal retirement age, so the pension will be based on an enhanced amount.

If you are over 65, the ‘long term’ pension will be based on your actual pension with no enhancement.

I'm in the 1995 section

If you are under 60, then the pension payable thereafter will be based on 50% of the tier 2 ill health retirement pension that you would have received had you retired on health grounds as at the date of death.

A tier 2 pension is usually enhanced by two thirds of your prospective service until your normal pension age, so the pension will be based on an enhanced amount.

 

If you are over 60, the ‘long term’ pension will be based on your actual pension with no enhancement.

I’ve been in the pension scheme for less than two years

Your adult dependent is only entitled to a short term pension unless you are over the scheme’s normal pension age.

This is 60 in the 1995 section, 65 in the 2008 section and state pension age in the 2015 scheme.

A pension may, however, be payable from the state.

I have drawn my pension

If you are in the 2008 section or 2015 scheme and are in receipt of draw down benefits, the ‘long term’ pension will be calculated as per the rules for death in service (in relation to your ongoing active pensionable service) and death after retirement (in relation to the drawn down benefits).

Child allowance

If your children qualify at the time of your death, they will each be entitled to a child’s allowance.

Child allowance payments are payable until your child reaches age 23, unless they are unable to live independently, then they will be paid for life.

In order to qualify they will need to be financially dependent on you and be:

  • under age 23
  • over age 23 but unable to earn a living due to a permanent physical or mental condition present at your time of death.

A child can include:

  • your biological child
  • an adopted child
  • a step child
  • a child of your civil or nominated qualifying partner
  • a grandchild
  • any dependent child
  • a nephew or a niece.
I'm in the 1995 section

The amount payable to your qualifying children will depend on whether a long term widow/widower/registered partner or nominated partner pension is also payable.

If a payment is also being made to your partner then each child is entitled to 25% of the tier 2 pension that would have been payable had you retired on health grounds at the date of death. A maximum of 50% of the tier 2 pension is payable to two or more children.

Where no payment is being made to a partner, each child is entitled to 33.33% of the tier 2 pension that would have been payable had you retired on health grounds at the date of death. A maximum of 66.66% of the tier 2 pension is payable to two or more children.

I'm in the 2008 section

The amount payable to your qualifying children will depend on whether a widow/widower/registered partner or nominated partner pension is also payable.

If a payment is also being made to a partner, each child is entitled to 18.75% of the pre-commutation tier 2 pension payable had you retired on health grounds at the date of death. A maximum of 37.5% of the tier 2 pension is payable to two or more children.

Where no payment is being made to a partner, each child is entitled to 24.99% of the pre-commutation tier 2 pension payable had you retired on health grounds as at the date of death.

A maximum of 49.98% of the tier 2 pension is payable to two or more children.

 

I'm in the 2015 scheme

The amount payable to your qualifying children will depend on whether a widow/widower/registered partner or nominated partner pension is also payable.

If a payment is also being made to a partner, each child is entitled to 16.875% of the pre-commutation tier 2 pension payable had you retired on health grounds at the date of death. A maximum of 33.75% of the tier 2 pension is payable to two or more children.

Where no payment is being made to a partner, each child is entitled to 22.49% of the pre-commutation tier 2 pension payable had you retired on health grounds as at the date of death.

A maximum of 44.98% of the tier 2 pension is payable to two or more children.

 

I've been in the scheme for less than two years

The child allowance is payable irrespective of your length of service and is calculated on a minimum of 10 years’ service where service has not been this long.

When does the child allowance become payable?

If your child is in the care of an adult dependent partner who is in receipt of a short term pension, the child allowance will start from the day after the short term pension ends. This is six months after the date of death.

If an adult dependent partner pension is payable but your child is not in that person’s care, your child will receive a short-term pension payable for three months, followed by the child allowance thereafter.

Where no adult dependent partner pension is payable, the short term pension is payable for six months to your child. Thereafter, the child allowance becomes payable.

My child is not able to live independently

If your child, as result of mental or physical impairment present at the time of your death, is unable to support themselves, the child allowance can be paid for life.

 

How can I provide more benefits to my dependents through the pension scheme

You are able to allocate a maximum of a third of your pension to a dependent which will be payable in addition to the benefits outlined above.

You are able to purchase additional pension which can include additional dependent’s benefits. 

If you had a contract to purchase added years or additional pension in place for a year or more, the full contract is paid up on death before your normal pension age.

Equity of benefits across pensions schemes

The dependent benefits from the 2008 section and the 2015 scheme equate to those provided by the 1995 section.