What happens to your NHS pension if you die single?

[EachandEveryone]

I know its a morbid thought but does it really go nowhere if youve paid into for 30 years? It seems really unfair. Ive looked at the list who it can go to and its partner married or live in or children. It does say other nominees but I cant work out if ot means it could go to a niece/live in friend whos on all the bills and looks after me.

AFAIK you can nominate anyone you like to receive your lump sum (death in service or within 5yrs of you retiring), but your monthly️ pension can only go to partners or dependents.

I'm not sure if you can name dependants. Maybe contact pension services?

If you have a friend who lives with you and shares bills with you, and if you realise that you haven't got long to live, I think you should get married to her so that she gets your pension.

My mum had to do something to her pension after she got divorced to ensure it could come
to us and not die with her as it could only be passed to a spouse, I don't quite understand it all but involved withdrawing...moving it around or something. This wasn't NHS though, so you might want to talk to an IFA.

I don’t know about NHS pensions in particular but I’m afraid it’s how pensions are affordable to employers - they rely on a certain number of people dying early and not receiving as much/anything to fund everyone else. Think of what you have paid in like an insurance premium.

I am afraid it’s another example of the ‘single tax’.

That's a very specific scenario... did you look up OP's post history?

It’s in the OP’s post, ‘I cant work out if ot means it could go to a niece/live in friend whos on all the bills and looks after me.’

I think PP just means that you could get married as a paper exercise in order that the pension could be passed on.

You say they consider a live in partner, and you say you have a live in friend? If that’s the case then the line between friend/partner is quite narrow, and they can’t prejudice you for being in a same sex relationship. I’d phone the pension service to get clarity, and then ask my ‘friend’ how she would feel about being noted on my paperwork as a live in partner.

The point about defined benefits pension schemes is that they are priced by actuaries based on the probabilities that some people will die without having dependents. If everyone could pass their pension on to anyone then your contributions would increase massively.

Think about it like insurance. If everyone who bought insurance made a claim to the value of their premiums paid, prices would shoot up.

Your state pension is not actually like an insurance scheme. The money you paid has not been saved up anywhere for you personally. We pay tax and it goes straight out to current pensioners. The expectation is that when you retire, future workers’ taxes do the same for you. You receive, in the end, much more than you actually “pay in” because of that.

So it isn’t really designed to be passed on apart from to be used for your dependents, as the money is part of a collective taxation/benefit structure, not like a private pension or savings account.

You receive, in the end, much more than you actually “pay in” because of that.

Unless you die very shortly after retiring, which was the OP's question

@HelloGooodBye no, of course I didn't, I just read the actual post. It's something that my friends and I are thinking of doing though.

I think it goes back to the NHS

I know someone who did this, he was terminally ill and wanted the woman who cared for him to get his pension.

I understand how state pensions work but is the same sort of thing for NHS pensions? I knew someone who was pissed off because her aunt who, was a nurse, couldn't pass her pension onto her. The aunt was well into her 80's or even maybe 90's when she died and she had a good 3 decades out of the pension at least.

Defined benefit pension schemes rely on some people dying early so that the fund can cover everyone. This is why there are pretty tight rules on who can inherit the 'widow' part of the pension. Pension funds would completely collapse if the pension could be inherited by anyone nominated (they aren't faring well anyway).

As a single person, unless you have someone who can fit the bill as a financially dependent 'partner' then your pension folds back into the scheme. However the cash lump sum payable whilst you still work can go to your nominees if it satisfies the trustees of the scheme (therefore a niece for example).

It was one of the things that weighed down the greek economy. Civil service pensions were payable to unmarried daughters for life. Meaning that if your CS dad died when you were 25 you could get 60+ years of pension payments as long as you weren't legally married.

If you have a pension there should be a death in service benefit attached to it. You can nominate someone to recieve this upon your death. I was nominated by a close relative whom I cared for during illness and I received a lump sum from the pension fund upon their death xx

I have an nhs pension. You can nominate anyone.

Death in service can go to anyone I believe - certainly I'm in the CS scheme and understand that to be the case. But this is only paid if you die before retiring.

A widow/widower pension however has strict rules around who can claim it, otherwise it would be prohibitively expensive.

I know but what if you take medical retirement so cant really go back to work how long does that death in service last for? I mean its £90 grand not to be sniffed at. Does it mean its better tonwork until u are on your last legs and leave yr pension in. I know its morbid but no one will speak about it in real life

Death in service literally finishes the day your contract does.

You shouldn't be working yourself into the ground to provide for someone else - I know it's a large sum, but they have to draw the line somewhere.

The other option is to withdraw the maximum lump sum available if you believe your time will be shorter than average post retirement so you can leave that as a cash gift to someone in your will instead.

Frankly I'll be doing that because I don't believe I'll be a telegram from the King kind of person.

The bonus of missing out on your £90k death in service benefit is that it means you're still alive 😀. The benefit doesn't exist for you to assign to just anyone, it's for dependents who would be financially affected by the loss of a salary on your death.

Again, it's like saying to an insurance company "well, I haven't had any car accidents, can I have my premiums back?"

In some pension schemes you can opt out of DIS. Don't know about the NHS.

It dies with you apparently. My dad passed away and passed (part of) his NHS pension on to my mum. She passed away 10 weeks later and it was a fight to claim for those 10 weeks. He was only 67 so hadn’t been claiming that long.

Similarly my mum’s teachers pension died with her too. Again she hadn’t been claiming that long.

Those defined benefit schemes greatly benefit those who live a long time. Dependent on life expectancy you might be better transferring out of a defined benefit scheme and buying a policy with other terms - or taking some of the pension as a lump sum. But ultimately pension schemes rely on some members dying younger and not getting full benefit to subsidise those who live a long time.

This isn’t strictly correct. DIS benefits can be claimed up to 5 years after leaving pensionable service. However, if the retiree has claimed a bigger lump sum for example, the DIS lump sum is reduced by that amount.