PTM071100 - Death benefits: essential principles: authorised benefits following the death of a member
Source: gov.uk (2025-12-10)


As of 6 April 2024 there is no longer lifetime allowance. If you are looking for information about protections, enhancement factors and the lifetime allowance charge please see these pages on The National Archives (https://webarchive.nationalarchives.gov.uk/ukgwa/20240305022829/https:/www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm090000). If you are looking for information about the principles of lifetime allowance and benefit crystallisation events please see these pages of The National Archives (https://webarchive.nationalarchives.gov.uk/ukgwa/20240305022836/https:/www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm080000).

The types of authorised benefits a registered pension scheme can make as authorised payments following the death of a member depends on:
- the type of pension arrangement providing the benefit and
- whether or not the member put benefits into payment, and
- where benefits were put into payment, the type of pension that was provided to the member.
A member may have had a mixture of benefits that were put into payment and uncrystallised rights under a pension scheme when they died. They may also be receiving different types of pension from the pension scheme.

Rights are uncrystallised if, before the member died, they weren't entitled to payment of benefits in respect of those rights.

PTM071000 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm071000) provides guidance on the types of arrangement providing death benefits.

Money purchase death benefits that may be provided from uncrystallised funds (#benefits-provided-from-uncrystallised-funds)Death benefits payable under a lifetime annuity contract (#benefits-under-a-lifetime-annutiy-contract)Money purchase benefits following the death of a member receiving scheme pension (#member-receiving-scheme-pension) Collective money purchase benefits payable following the death of a member receiving scheme pension (#Collective money purchase benefits payable following the death of a member receiving scheme pension) Benefits payable following the death of a member receiving drawdown pension (#Benefits payable following the death of a member receiving drawdown pension) Benefits payable following a member’s death under a defined benefits arrangement (#Benefits payable following a member’s death under a defined benefits arrangement)

Money purchase death benefits that may be provided from uncrystallised funds

Sections 165, 167 and 168, Part2 Schedule 28 and Part 2 Schedule 29 Finance Act 2004

Funds that are uncrystallised at the member’s death under a money purchase arrangement may be used to provide any one or more of the following types of pension:
- a dependants’ annuity – see PTM072200 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm072200),
- a nominees’ annuity - see PTM072200 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm072200),
- a dependants’ drawdown pension – see PTM072400 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm072400),
- a nominees’ drawdown pension – see PTM072400 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm072400), or
- a dependants’ scheme pension – see PTM072100 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm072100).
If a dependant’s pension entitlement is small in certain circumstances it may be paid as a trivial commutation lump sum death benefit – see PTM073700 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm073700). A nominees’ pension cannot be commuted into a trivial commutation lump sum death benefit.

Uncrystallised funds under a money purchase arrangement may also be used to pay:
- an uncrystallised funds lump sum death benefit – see PTM073200 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm073200), or
- a charity lump sum death benefit – see PTM073900 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm073900).
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Death benefits payable under a lifetime annuity contract

When a member purchases a lifetime annuity contract, they have the option of choosing one that provides benefits following their death. This may be as:
- a joint-life contract where the contract provides for a further annuity to be paid to a dependant or nominee following the member’s death, or/and
- a guarantee to make payments for a minimum period or of a certain amount.
Where the member was receiving lifetime annuity payments before they died only the following payments are authorised payments under the annuity contract:
- the continuation of the member’s lifetime annuity for the remainder of any guarantee period that applied for the contract – see PTM071500 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm071500),
- the provision of a further annuity to a dependant or nominee of the member – see PTM072200 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm072200), and
- an annuity protection lump sum death benefit – see PTM073400 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm073400).
A lifetime annuity contract can provide for more than one of the benefits to be paid. The lifetime annuity contract may pay a benefit to more than one dependant or nominee. Whether or not the benefits are available on the member’s death, and in what form or amount will be a specified under the terms of the annuity contract.

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Money purchase benefits payable following the death of a member receiving scheme pension

Following the death of a member who was being paid a scheme pension under a money purchase arrangement (which includes cash balance arrangements), the following authorised benefits can be provided:
- the continuation of the member’s scheme pension for the remainder of any guarantee period that applied for that scheme pension – see PTM071500 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm071500),
- a dependants’ annuity – see PTM072200 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm072200),
- a nominees’ annuity - see PTM072200 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm072200),
- a dependants’ drawdown pension – see PTM072400 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm072400),
- a nominees’ drawdown pension – see PTM072400 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm072400),
- a dependants’ scheme pension – see PTM072100 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm072100), or
- an annuity protection lump sum death benefit – see PTM073400 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm073400).
If a dependant’s pension is small, in certain circumstances it may be paid as a trivial commutation lump sum death benefit – see PTM073700 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm073700). A nominees’ pension cannot be commuted into a trivial commutation lump sum death benefit.

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Collective money purchase benefits payable following the death of a member receiving scheme pension

Collective money purchase arrangements are a specific type of money purchase arrangement with distinct rules governing benefit provision (see PTM023450 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm023450)).

Following the death of a member who was being paid a scheme pension under a collective money purchase arrangement, the following authorised benefits can be provided:
- the continuation of the member’s scheme pension for the remainder of any guarantee period that applied for that scheme pension – see PTM071500 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm071500),
- a dependants’ scheme pension – see PTM072100 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm072100), or
- an annuity protection lump sum death benefit – see PTM073400 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm073400).
If a dependant’s pension is small, in certain circumstances it may be paid as a trivial commutation lump sum death benefit – see PTM073700 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm073700).

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Benefits payable following the death of a member receiving drawdown pension

Following a member’s death any remaining funds in the member’s drawdown pension fund or flexi-access drawdown fund may be used to:
- provide a drawdown pension fund lump sum death benefit (see PTM073500 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm073500)) or flexi-access drawdown fund lump sum death benefit (see PTM073600 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm073600)),
- pay a charity lump sum death benefit – see PTM073900 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm073900),
- purchase a dependants’ annuity – see PTM072200 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm072200),
- purchase a nominees’ annuity - see PTM072200 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm072200),
- provide dependants’ drawdown pension – see PTM072400 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm072400),
- provided nominees’ drawdown pension – see PTM072400 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm072400), or
- provide a dependants’ scheme pension – see PTM072100 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm072100).
If a dependant’s pension is small in certain circumstances it may be paid as a trivial commutation lump sum death benefit – see PTM073700 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm073700). A nominees’ pension cannot be commuted into a trivial commutation lump sum death benefit.

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Benefits payable following a member’s death under a defined benefits arrangement

Sections 167 and 168, Part2 Schedule 28 and Part 2 Schedule 29 Finance Act 2004

The type of authorised benefits that may be provided following the member’s death depends on whether or not the member had put benefits into payment before they died. A member may have had a mixture of rights that have gone into payment and uncrystallised rights under a pension scheme when they died.

A defined benefits arrangement can provide:
- a defined benefits lump sum death benefit – see PTM073100 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm073100), and
- a dependants’ scheme pension – see PTM072100 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm072100).
whether or not the member had put any of their benefits into payment before they died.

If the member was in receipt of a scheme pension before they died, the following death benefits may also be provided:
- the continuation of the member’s scheme pension for the remainder of any guarantee period that applied for that scheme pension – see PTM071500 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm071500); and
- a pension protection lump sum death benefit – see PTM073300 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm073300).
If a dependant’s pension entitlement is small in certain circumstances it may be paid as a trivial commutation lump sum death benefit – see PTM073700 (https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm073700).

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