What happens to your SIPP when you die?
A SIPP does not pass under your will. It passes at the discretion of the scheme, guided by your expression of wish, which is why that form matters more than almost any other document you hold. The tax on it turns on one thing: whether you die before or after your 75th birthday.
- The direction: an expression of wish, not the will; trustees exercise discretion.
- Before 75: generally paid free of Income Tax, subject to the lump sum and death benefit allowance.
- At or after 75: taxed at the recipient's marginal rate when they draw it.
- The options: a lump sum, or beneficiary drawdown, which usually produces a better outcome.
01 It is not in your will
A pension is held under trust, and the trustees decide who receives the death benefit. Your expression of wish tells them what you want, and they follow it in the overwhelming majority of cases — but the discretion is theirs, which is what keeps the fund outside your estate.
That means a will naming beneficiaries has no effect on the pension, and an expression of wish naming a former spouse is what the trustees will act on. It is the most consequential form most people never revisit.
It also means the pension can be split between several beneficiaries in whatever proportions you name, which a single-beneficiary nomination frequently fails to use.
02 Age 75 decides the tax
Where death occurs before 75, death benefits from uncrystallised funds and from drawdown are generally paid free of Income Tax, tested against the lump sum and death benefit allowance of £1,073,100.
Where death occurs at or after 75, the benefits are taxed at the recipient's marginal rate when they draw them. That is the whole of the difference, and it makes a single birthday one of the sharpest lines in UK tax.
Separately, unused pension funds are due to be brought within the Inheritance Tax net from April 2027, which changes the estate side without altering the Income Tax treatment.
Shows: the tax on a death benefit depending on whether death occurs before or after 75. Ignores: the lump sum and death benefit allowance, Inheritance Tax, and the beneficiary's other income.
On the defaults above, the worked example shows £52,000. Before 75 the fund generally passes free of Income Tax; at or after 75 the beneficiary pays £52,000 at their rate — which drawdown lets them spread across years.
Source: Lifetime allowance and the allowances that replaced it
03 Lump sum or beneficiary drawdown
A beneficiary can usually take the fund as a lump sum or as beneficiary drawdown, keeping it inside a pension and drawing income over time. Drawdown is generally the better outcome after 75, because the beneficiary controls when the tax arises rather than paying it all in one year.
It also keeps the money in a sheltered environment for the beneficiary's own lifetime, and lets it pass on again. A lump sum ends that.
Whether beneficiary drawdown is available depends on the scheme's rules, and not every provider offers it. That is a question worth asking of the scheme you intend to die holding, which is a strange sentence and a genuinely useful check.
Source: Plan your retirement income
Your will does not control your pension. It passes under an expression of wish, at the trustees' discretion, and that form is the most consequential piece of paper most people never look at twice — I have seen one naming a spouse who left in 2009. Update it this week. Then check whether the scheme offers beneficiary drawdown, because a beneficiary who can take income over years rather than a lump sum in one tax year usually keeps far more of it, particularly if you die after 75.
FAQ
Does my will control my pension?
No. A pension is held under trust and the trustees decide, guided by your expression of wish. A will naming beneficiaries has no effect on it, and an out-of-date expression of wish is what the trustees will act on.
What difference does age 75 make?
It decides the Income Tax. Death before 75 generally means benefits are paid free of Income Tax, subject to the lump sum and death benefit allowance; at or after 75 they are taxed at the recipient's marginal rate when drawn.
Is a lump sum or drawdown better for my beneficiary?
Usually drawdown, especially after 75, because the beneficiary controls when the tax arises rather than paying it all in one year — and the money stays inside a pension for their own lifetime. Not every scheme offers it, so it is worth checking.
Sources
Regulator references
- Tax on your private pension contributions · GOV.UK · 2025The relief, allowance and charge framework the whole post sits inside.Last verified: 2026-09-07
- Lifetime allowance and the allowances that replaced it · GOV.UK · 2025The lump sum allowance rules that replaced the lifetime allowance from April 2024.Last verified: 2026-09-07
- Plan your retirement income · GOV.UK · 2025The government's own sequence for turning pension pots into income.Last verified: 2026-09-07
Calculator unit tests · the assertions this page's worked example is checked against, and their last result
Changelog
- 2026-09-07 — initial publish (new format)
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Jordan Reeves
Founder of Talk Through Wealth. A software engineer for over a decade before turning to retirement planning, Jordan built the projection engine after watching family members get fragmented, country-by-country advice that never reconciled. He writes about retirement the way the engine computes it: month-by-month, lifetime-long, and skeptical of any rule of thumb that hasn't been run through the math.