Pension Provider Death Notification: Practical Steps and Documents

Losing a loved one is an emotionally taxing experience, further complicated by the mountain of administrative tasks that follow. One of the most critical, yet often misunderstood, responsibilities is the pension provider death notification. Unlike other assets, pensions in the UK follow specific trust laws and tax regulations that change frequently. For the 2025–2026 period, new rules regarding inheritance tax and the "Triple Lock" on State Pensions make it even more vital to handle these notifications accurately and promptly.

Whether you are an executor, a personal representative, or a grieving spouse, understanding how to navigate a pension death claim is essential for securing the financial future of the beneficiaries. This guide provides a comprehensive roadmap for notifying providers, identifying lost assets, and avoiding the common pitfalls that can lead to significant tax penalties.

Understanding the Landscape: State vs. Private Pensions

Before sending a pension provider death notice, you must distinguish between the different types of pensions the deceased may have held. Each has a distinct notification process and set of rules.

The UK State Pension (2025–2026)

The State Pension is managed by the Department for Work and Pensions (DWP). For the 2025/26 tax year, the New State Pension has risen to £230.25 per week, with a confirmed increase to £241.30 per week scheduled for April 2026.

To notify the DWP, most people use the "Tell Us Once" service during the death registration process. This service automatically informs the DWP to stop payments. However, if this service is not available in your area or you miss the window, you must contact the Pension Service directly.

Private and Workplace Pensions

This is where most beneficiaries encounter difficulties. The "Tell Us Once" service does not notify private providers like Nest, Aviva, or Legal & General. You must contact each of these companies individually to initiate a pension death claim.

Essential Documents for Notification

When you contact a pension provider, they will require a specific set of data to freeze the account and begin the valuation process. Having these ready will prevent months of back-and-forth correspondence.

Required Information

• Deceased’s full name and last known address.
• Date of birth and National Insurance (NI) number.
• The date of death.
• Policy or member reference numbers (if available).
• Your contact details and relationship to the deceased.

Required Documentation

Pension providers rarely accept digital scans for initial claims. You should order 5–10 certified copies of the death certificate. While some modern providers are moving toward digital verification, many still require a physical certified copy to be mailed to them.

The Two-Year Rule and Tax Implications

One of the most important professional recommendations is the "Two-Year Rule." For the 2025/2026 tax year, if a pension member died before age 75, their beneficiaries can usually receive the pension benefits tax-free. However, this is strictly conditional: the claim must be settled, and the money must be paid out within two years of the provider being notified of the death.

If the process drags on beyond this two-year window, the tax-free status may be lost, and the lump sum could be taxed at the beneficiary’s marginal income tax rate.

Death After Age 75

If the deceased was 75 or older at the time of death, the tax treatment changes. In this scenario, any beneficiaries will pay income tax on the pension they receive at their marginal rate (20%, 40%, or 45%), regardless of how quickly the claim is processed.

The LSDBA (Lump Sum and Death Benefit Allowance)

Following the removal of the Lifetime Allowance in 2024, the LSDBA remains at £1,073,100 for the 2025/26 tax year. This is the total amount that can be paid out tax-free as a lump sum across all of the deceased's pensions. If the total exceeds this amount, the excess is taxed as income.

Step-by-Step Guide to the Notification Process

To ensure a smooth pension death claim, follow these practical steps:

1. Identify All Providers

Search through physical files and emails for "Annual Benefit Statements." If you suspect there are missing pots, use the official Government Pension Tracing Service. It takes less than 8 minutes to initiate a search, though it may take several weeks to receive a response.

2. Check the "Expression of Wish"

One of the most common misconceptions is that a Will dictates who gets a pension. In reality, because most pensions are held under a discretionary trust, the pension trustees decide who receives the funds. They are guided by a document called an "Expression of Wish" (or Nomination Form) held by the provider.

3. Send the Formal Notification Letter

Your letter should clearly state the intention to claim death benefits. Request two specific things:

1. A "Death Benefits Claim Pack."
2. A "Date of Death Valuation" (this is essential for the Personal Representative to report the estate value to HMRC).

4. Notify the Employer

If the deceased was still working, the pension provider death notification is often handled by the HR department, especially for "Death in Service" benefits. Be sure to check our Employer Death Notification Template for specific wording on how to handle workplace benefits.

Recent Trends and the 2027 "IHT Cliff"

The 2025/26 tax years are currently considered "planning years" for the industry. The UK government has signaled that from April 2027, most pensions will be brought into the taxable estate for Inheritance Tax (IHT) purposes. Currently, most pensions sit outside the estate and are not subject to IHT.

This upcoming change has led to a surge in families "crystallizing" pensions early or seeking valuations to understand their future liability. As a Personal Representative, you have an increased responsibility in 2025/26 to report accurate values to HMRC to prepare for these shifting regulations.

Real-World Examples

Example 1: The Outdated Nomination

John passed away in 2025. His Will left everything to his current wife, Mary. However, John had a private pension from the 1990s where the "Expression of Wish" still named his first wife. Because pensions are held in trust, the trustees initially prepared to pay the first wife. Mary had to provide extensive evidence of their long-term marriage to persuade the trustees to exercise their discretion in her favor—a process that delayed payment by 14 months.

Example 2: The Overpayment Trap

Susan died in May. Her family forgot to use "Tell Us Once" and didn't notify the DWP until August. The State Pension continued to be paid into her bank account for three months. When the estate was being settled, the DWP issued a formal demand for the return of £2,800. Since the money had already been spent on funeral costs, the family had to cover the debt out of their own pockets. For more on managing bank accounts, see our guide on Accessing Deceased Bank Accounts.

Example 3: The Two-Year Rule Success

Sarah notified her father's workplace pension provider within two weeks of his death. Because she provided all the certified documents immediately, the claim was settled in 18 months. Since her father was 72, the entire £150,000 lump sum was paid to her tax-free. Had she waited another 7 months to notify them, she could have faced a tax bill of up to £60,000.

Common Mistakes to Avoid

• Assuming the Will Covers It: As noted, the Will is not the primary document for pensions. Always check the provider's nomination form.
• Delaying the Notification: Every month you wait is a month closer to the "Two-Year Rule" deadline and potentially more overpayments to claw back.
• Forgetting "Death in Service": If the deceased died while employed, there may be a lump sum worth 2x to 4x their salary available through the pension scheme.
• Sending Original Documents: Never send your only original death certificate. Only send certified copies. If you are also dealing with other financial entities, you might need a Credit Card Company Death Notification or an Investment Account Death Notification.

Conclusion

Notifying a pension provider is a multi-step process that requires attention to detail and an understanding of UK tax law. By acting quickly, you can ensure that beneficiaries receive their entitlements tax-free (where applicable) and avoid the stress of DWP clawbacks. Remember to check for "Expression of Wish" forms, stay mindful of the age 75 rule, and utilize the Pension Tracing Service to capture every asset the deceased worked hard to build.

If you are managing other aspects of an estate, ensure you are following a consistent process across all financial institutions to maintain an accurate valuation for probate.