Pension Expression of Wishes 2026: How to Ensure Your Death Benefits Go Where You Want

What is an Expression of Wishes?

An Expression of Wishes (sometimes called a nomination of beneficiaries form or nomination form) is a document you submit to your pension scheme trustees telling them who you would like to receive your pension death benefits if you die while you still have funds in the pension.

Despite its importance, many pension members either never complete one or complete it once and never update it — meaning their pension might pass to an ex-spouse, a deceased parent, or someone who no longer reflects their intentions.

Why pensions fall outside the estate

Most defined contribution (DC) pension funds — workplace pensions, personal pensions, SIPPs — are held in trust by pension scheme trustees. Because the legal ownership of the pension rests with the trustees (not you personally), the pension is not your asset for probate or IHT purposes when you die.

This has two major consequences:

1. No IHT — the pension does not count toward your taxable estate (currently). No 40% IHT on the pension pot.
2. No probate — the pension is distributed directly by the trustees without going through probate. This is faster and avoids the administration delay.

The trustees decide who receives the death benefits — guided by your Expression of Wishes and any discretionary nomination.

Discretionary vs non-discretionary nomination

Discretionary nomination

Most modern pensions operate under a discretionary trust, meaning trustees have the legal power to distribute death benefits to anyone from the class of potential beneficiaries (usually defined broadly as family members and dependants). Your Expression of Wishes guides their decision but does not bind them.

This is actually beneficial from an IHT perspective — because the trustees have discretion (the payment is not guaranteed to go to a specific person), the pension remains outside the member's estate.

Non-discretionary nomination

Some older pension contracts or enhanced annuity products may allow a non-discretionary nomination — a binding instruction that forces payment to a specific person. This provides certainty but can cause IHT exposure if it results in the pension being treated as part of the estate.

Check your pension documentation carefully and seek advice if in doubt.

Tax on pension death benefits: age 75 is the dividing line

Death before age 75

If you die before reaching age 75:

• Lump sum paid from a DC pension: tax-free for the beneficiary, provided it is paid within two years of the date the trustees are notified of death.
• Drawdown fund passed to a beneficiary (flexi-access drawdown): the beneficiary can draw from it free of income tax at any time.

If the payment is delayed beyond two years (e.g. due to disputed nominations or slow administration), it may become taxable.

Exception: The £1,073,100 lifetime allowance was abolished from April 2024. However, there is still a lump sum and death benefit allowance (LSDBA) — currently £1,073,100 — above which tax applies at the recipient's marginal rate.

Death at age 75 or later

If you die at 75 or older:

• All death benefits — whether taken as a lump sum or via inherited drawdown — are taxed as the beneficiary's income in the year received, at their marginal rate.
• There is no tax-free element.
• A beneficiary receiving a £500,000 pension death benefit in one tax year may be pushed into the 45% additional rate band.

This makes the choice of beneficiary and the timing/method of payment highly significant for older pensioners.

The 2027 IHT change: pensions inside the estate

The Autumn Budget 2024 announced that from April 2027, unused defined contribution pension pots will be brought within the scope of Inheritance Tax.

Under the proposed rules:

• The pension trustees would be responsible for calculating and paying IHT on death benefits above the nil-rate band thresholds.
• IHT would apply alongside any existing IHT on the estate — potentially pushing the estate into a higher combined tax burden.
• The standard nil-rate band (£325,000) and residential nil-rate band (£175,000) would be available against the combined estate + pension value.

This is a major change. For the many higher net worth individuals who have used their pension as an IHT-planning vehicle (specifically leaving pensions untouched and spending other assets first), the 2027 change reduces the advantage significantly.

Note: The 2027 reforms are subject to consultation and final legislation. Seek up-to-date specialist advice as the details are confirmed.

Who can you nominate?

You can nominate any combination of:

• Spouse or civil partner — typically the first nomination for most people.
• Children and grandchildren — can be direct beneficiaries or can receive via a trust.
• Other family members — siblings, parents.
• Friends — pension schemes can pay to anyone you nominate.
• A trust — particularly useful if you have minor children or wish to give trustees flexibility.
• A charity — pension death benefits passed to registered charities are tax-free.

You can split the nomination (e.g. 50% to spouse, 25% to each child). You can also set up a family trust as the beneficiary, giving trustees flexibility to distribute over time in a tax-efficient way.

Updating your Expression of Wishes

The biggest risk is outdated nominations. Common situations where you should update:

How to update

Contact your pension provider or scheme administrator. Most modern providers allow online updates via their member portal. For older occupational schemes, you may need to complete a paper form. There is usually no cost to update.

Keep a copy of all submitted nominations and date them. If you have multiple pension pots, you need to submit an Expression of Wishes to each provider separately.

DB pension death benefits

Defined Benefit (DB) scheme death benefits are different:

• Most DB schemes pay a spouse's or dependant's pension on death — a percentage (typically 50%) of the member's pension, paid for life.
• Lump sum death grants (typically 2–4× final salary) may also be payable, subject to Expression of Wishes.
• The pension income paid to a surviving spouse is taxable as their income.
• DB pensions do not pass to children as an inheritable pot — they pay a spouse's pension, then cease.

Guide to UK pension types