Your Will Doesn't Decide Who Gets Your Pension
Have you made a Will? And do you assume it covers everything you're leaving behind — including your pension?
Most people do. For most people, it doesn't.
It's one of the most common misunderstandings in estate planning, and it isn't a technicality. Your pension is often one of the largest things you'll leave behind, and the document you've carefully drafted, signed and witnessed has no power over it whatsoever.
This article explains which document actually decides, who makes the choice, and why the change arriving in April 2027 makes it more important than it has ever been.
Why your pension sits outside your Will
A Will deals with your estate — the assets you own outright. Your home, your savings, your investments, your possessions. When you die, your executors gather those things in and distribute them according to your instructions.
A pension usually isn't among them. Most pensions are held under a trust established by the scheme, and while you have rights under that trust during your lifetime, the fund does not belong to you in the way your house does. It has never been yours to give away by Will.
This isn't an obscure point. The STEP guidance used in professional Will preparation lists pension benefits among the assets that sit outside the estate, and instructs the practitioner to check whether a pension is nominated and whether it passes outside the estate — precisely because the Will cannot reach it.
The practical consequence is stark. You could leave everything to one person under your Will and your pension could go somewhere else entirely. The two documents do not speak to each other, and nothing automatically reconciles them.
So who does decide?
In most schemes, the trustees do.
These are described as discretionary schemes: the trustees select who receives the death benefits from a defined range of people — a spouse or civil partner, children, anyone who was financially dependent on the member. The decision is theirs.
They do not make it in a vacuum. They consider the member's circumstances at the date of death, and they look at what the member told them they wanted.
Which brings us to a piece of paper most people have entirely forgotten about.
The expression of wishes form
Sometimes called a nomination form, sometimes a beneficiary nomination, this is the document you completed when you joined the scheme.
For a great many people, that was a very long time ago. Before a divorce. Before children were born. Before a second marriage. Sometimes before the person named on the form died.
How much weight that form carries depends on your scheme. In most, it is not binding — the trustees will consider it carefully but reach their own decision. In some schemes the member's choice does bind the scheme. Either way, the form is the clearest available evidence of what the member actually wanted, so in practice it very often determines the outcome.
That is why an out-of-date nomination is not a minor administrative loose end. It is the single strongest signal the trustees have, and if it points at the wrong person, that is where they will look first.
Nothing in this article is a suggestion about what should be on your own form. But it is worth knowing where it is, and whether it still says what you would want it to say today.
What changes on 6 April 2027
Until now, the fact that a pension sat outside the estate carried a significant tax advantage: it generally sat outside the reach of Inheritance Tax as well.
That changes. From 6 April 2027, unused pension funds are brought into the deceased's estate for Inheritance Tax purposes. This is not a proposal or a consultation — it is legislated.
The effect is a genuine oddity, and it is worth stating plainly:
You will have a pot of money that your Will cannot direct, but which is taxed as though it were part of your estate.
And the responsibility follows the Will, not the pension. Under the new rules, personal representatives — your executors, appointed under that same Will — are responsible for reporting and paying the Inheritance Tax attributable to the pension. Once benefits have been paid out, the beneficiaries become jointly liable alongside them.
So one document decides who receives the money. A different document decides who has to deal with the bill. If those two documents point in different directions, the people you appointed are left reconciling a situation nobody designed.
Two documents, one plan
This is exactly the sort of gap that opens up when estate planning is done in pieces.
Nobody at your pension scheme is reading your Will. Nobody drafting your Will can see your nomination form unless somebody thinks to ask for it. Your Will might be immaculate and your nomination decades out of date, and no part of the system will flag the mismatch — because no part of the system is looking at both.
That is the coordination problem in a single, very ordinary example. It isn't about complexity or clever structures. It's about somebody holding the whole picture rather than one corner of it, and asking the obvious question: do these actually agree with each other?
If you take one thing from this article, let it be that the question is worth asking — of your pension, and of everything else that passes outside your Will.
This article is general information about UK estate planning and does not constitute legal or tax advice. Your circumstances are unique — book a free chat with us to talk through yours.
If you'd like to chat through your own situation, you can book a free, no-obligation 15-minute call. No pressure, no jargon — just a friendly conversation to help you feel more informed.
See our YouTube video on this topic: https://youtu.be/VlKHW8sQBZI