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<h3><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: &quot;Open Sans Condensed&quot;, sans-serif; font-size: var(--font-size-h3); font-weight: bold; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto">What happens to your pension when you die?</span><br></h3><p>The death benefits that may be payable from your pension are considered separately to your will, and they depend on:</p><ul><li>which type of Scheme and Section you belong to</li><li>the options you select, and </li><li>whether you’re retired or still working when you die </li></ul><p><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: inherit; font-size: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto">You’ll find a brief guide below, but please refer to your Member Guide for more specific details of your own death benefits. Your Member Guide can be found under ‘My library’ when you log into your <a href="/my-rps">myRPS account</a>.</span><br></p><h4><strong></strong><strong>1. Death benefits for retired, defined benefit (DB) members</strong></h4><p><strong>&nbsp;</strong>If you’re retired, and you’re a DB member of the Railways Pension Scheme (RPS), your <strong>death benefits</strong> could include: </p><ul><li>Spouse’s pension – payable to a spouse, civil partner or same-sex spouse you were living with or married to at the date of your death. For many members this would be worth around half your basic pension. </li><li>Dependants’ pension – paid to a person who depended on you financially for 2 years prior to your death. The value may vary depending on circumstances and will reduce if the eligible dependent is younger than you by 10 years or more. </li><li>Children’s pension – at least the 2 youngest eligible children normally receive pensions until they are 18. The youngest child will typically receive 50% of the eligible spouse’s pension and the second child will receive 25%. If an eligible child continues in full-time education after they reach 18, the pension may still be paid, subject to Trustee or Committee agreement. If a child is disabled, the pension may be payable for life, if the Trustee agrees.<br></li></ul><p>There may also be <strong>a lump sum pay-out</strong> to your beneficiaries. The exact amount payable would depend on the amount of benefit you have taken since your retirement. If you have been receiving your pension for 5 years or more it’s unlikely any lump sum will be paid. <br></p><p>To help speed up the process, it’s important that you complete a Nomination form to let the Trustee know who you'd like the lump sum to be paid to. This can be done quickly and easily by <a href="/login">logging into your myRPS account</a> and going to ‘My Nominations’ in the ‘My Pension’ section of your member home page. Otherwise, it could go to the wrong person, or the payment may be delayed, which could result in tax being payable.<br></p><h4 data-list="2" data-level="1"><strong>2.&nbsp;</strong><strong>Death benefits for retired, industry wide, defined contribution (IWDC) members </strong><br></h4><p>If you’re a retired IWDC member, then your death benefits will depend almost entirely on how you have taken your pension. For example:<br></p><ul><li>If you have a single annuity, then all payments will stop when you die. That is unless you took a guarantee period, such as 5 years, in which case payments can continue until the end of that time or will be paid as a lump sum.&nbsp; </li><li>If you have drawdown, the remaining money could be paid out tax free if you die before the age of 75. If you’re over 75, then it is likely to be added to the beneficiaries’ other income and taxed. </li></ul><p>For more information, you would need to speak to your chosen annuity or drawdown provider, as these benefits are not payable directly by the IWDC scheme. <br></p><h4 data-list="2" data-level="1"><strong>3.&nbsp;</strong><strong>Death benefits for active, or preserved, DB members</strong><br></h4><p>If you’re an active, or preserved, defined benefit member and die whilst you’re still working, your pension could pay out a lump sum. If you’re younger than 75 when you die, this payment would normally be tax-free for your beneficiaries. Death benefits may also include a pension to either a spouse, civil partner or dependent child (as in point 1 above) but this would be taxed at their marginal rate of income tax. <br></p><h4 data-list="2" data-level="1"><strong>4.&nbsp;</strong><strong>Death benefits for active, or preserved, IWDC members</strong><br></h4><p>If you’re an active, or preserved, IWDC member, and die before your 75th birthday whilst you’re still working, and haven’t started drawing your pension, it can be passed to your beneficiaries tax-free.<br></p><h3>How can your friends/family claim? &nbsp;<br></h3><p>Before any claims can be made, the Scheme administrator, Railpen, will need to be notified of your death. <br></p><p>If you were still paying contributions into the RPS when you die, your employer will notify Railpen automatically. <br></p><p>If you had already stopped paying into your pension when you die, your death needs to be reported to Railpen directly. <br></p><p>This can be done by: <br></p><ul><li>Calling <strong>0800 012 1117</strong> and selecting Option 2: Bereavement. Or calling <strong>+44 1325 342 800</strong> internationally</li><li>Emailing <a href="mailto:csu@railpen.com"><strong>csu@railpen.com</strong></a><strong> </strong>or </li><li>Writing to Railpen at <strong>PO Box 300, Darlington, DL3 6YJ</strong><br></li></ul><p>For security reasons, Railpen will need to confirm at least three of the following: <br></p><ul><li>Your full name</li><li>Your date of birth</li><li>Your Pension reference number and/or National Insurance number</li><li>Your date of death</li><li>The name and address of whoever we should contact about your pension moving forward. <br></li></ul><p>Please ensure your friends/family are aware of these requirements. And know what they need to do in the event of your death.&nbsp; They can find more information <a href="/knowledge-hub/help-and-support/reporting-a-death">on the reporting a death page </a> <br></p><p>Once we know that you have died, we will write directly to whoever is dealing with your affairs. For example, this may be your next of kin or the executor of your estate. They will be asked to complete and return some forms. These forms will help us to identify anyone who might benefit from your pension.<br></p><p>Then, we will contact any potential beneficiaries to explain what they may be entitled to and what they need to do next. <br></p><p>Once we have received the information needed and proof of ID from all the potential beneficiaries, your death benefits will be considered by the Trustee. In line with scheme rules, the Trustee will decide where any death benefits should be paid.&nbsp; <br></p><p>All of this takes time, so it may take quite a while for any benefits to be paid following your death. <br></p><p>Our priority is making sure your money goes to the right people. We’ll do everything we can to make that process as quick and easy as possible for everyone involved. And our team will be on hand to help every step of the way.&nbsp;</p>

<p>With the start of the new financial year and the announcements in the Spring Budget, it seems timely to give members a bit of a re-fresher on tax fundamentals. From tax relief - to all of the tax allowances that apply in different situations and making the most of them all – we have it all covered in the next few lines. <br></p><h2>Tax relief on your pension – what is it? </h2><p>When you save for retirement via a pension, some of the money that would normally have gone to the government in tax from your wages, goes towards your pension instead. This is known as tax relief. It increases your savings and can be a substantial amount if it’s saved over many years. <br></p><p>Here’s an example. If you’re a basic-rate taxpayer and want to save £100 into your pension, because of the way tax relief works it will actually only cost you £80. The other £20 comes from the tax relief.<br><br></p><h2>There’s a limit to how much tax relief you can get</h2><p>While you can put as much money as you want into your pension, there are limits on the amount of pension savings that can benefit from tax relief each year and over your lifetime. These amounts are set by the government and may vary at the start of each financial year in April. <br></p><p>A few major pension-related changes were announced on 15 March when Chancellor of the Exchequer Jeremy Hunt presented his Spring Budget. <br></p><p>The main headlines were changes to the amount of tax-free savings members can make each year (the ‘Annual Allowance’) and over their lifetime (the ‘Lifetime Allowance’).<br><br></p><h2>Limits and tax allowances that could affect RPS members</h2><p>Find below a breakdown of the tax allowances that apply to pension savers and further information on the changes that were introduced to them in the Spring Budget. <br></p><p>The main tax allowance affecting members of the RPS who are in a defined benefit (DB) arrangement is the Annual Allowance, but there are other allowances that could apply too. </p><p>&nbsp;</p><h3>Annual Allowance </h3><p>The Annual Allowance (AA) is the limit on your pension savings in a single tax year before you need to pay a tax charge. For the year 2023/2024, this limit is either 100% of your annual earnings, or £60,000 (previously £40,000), whichever is lower. <br></p><p>If you want to consider whether your pension savings will exceed the Annual Allowance, you need to understand how increases in your pension savings are worked out. It’s not as simple as just knowing how much you’ve paid in. You can find out more in the <a target="_blank" href="https://cdn3.railpen.com/mp-sitefinity-prod/docs/default-source/rayn/guides-for-all-members/annual-allowance-tax-limits.pdf?sfvrsn=d6e4ef2d_18">Annual Allowance Read as you Need guide</a> <br></p><p>If you pay Additional Voluntary Contributions (AVC) to BRASS or AVC Extra, these also count towards your Annual Allowance. However, they are considered on a slightly different basis because they are classed as defined contribution (DC) arrangements. </p><p>&nbsp;</p><h3>Money Purchase Annual Allowance </h3><p>The Money Purchase Annual Allowance is a limit on the amount of tax-free pension savings you can make into a defined contribution (DC) pension arrangement. It would only affect you if you take savings from a defined contribution arrangement (which includes Additional Voluntary Contributions) in certain ways. <br></p><p>If you have a DB pension but you pay AVCs (BRASS or AVC Extra) and you start taking money from your AVCs, the amount you can continue paying into your pension and still get tax relief may reduce. This is because AVCs are classed as DC not DB, because they get invested in.<br></p><p>This is known as the Money Purchase Allowance (MPAA). The MPAA will be set at £10,000 (used to be £4,000) from 6 April. <br></p><p>If you start taking money from a DC arrangement and trigger the MPAA, the administrator or scheme manager will send you a flexible access statement to show you have triggered the MPAA. You must then send that statement to schemes where you are still actively accruing benefits. <br></p><p>You can check if you’ve gone above the MPAA using a simple tool on the <a href="https://www.gov.uk/guidance/work-out-your-allowances-if-youve-flexibly-accessed-your-pension" data-sf-ec-immutable="">government’s website</a>. <br></p><p>More information on the MPAA is available in your <a target="_blank" href="https://cdn3.railpen.com/mp-sitefinity-prod/docs/default-source/rayn/guides-for-all-members/annual-allowance-tax-limits.pdf?sfvrsn=d6e4ef2d_18">Read as you Need guide</a>. </p><h3>&nbsp;</h3><h3>Tapered Annual Allowance </h3><p>The Tapered Annual Allowance (TAA) generally applies to those on the highest incomes. This allowance gradually reduces the amount you can save into your pension plan annually depending on your income. &nbsp;It may affect you if your income is over £260,000 (previously £240,000) from 6 April 2023. </p><p>&nbsp;</p><h3>Lifetime Allowance </h3><p>The Lifetime Allowance (LTA) is the limit on the total amount of pension savings you can make in your lifetime without having to pay tax when you come to claim them. If your savings have exceeded the limit, you’d need to pay a tax charge on any amount over the allowance. The LTA limit has been frozen at £1,073,100 and it was announced 2 years ago that it won’t be changed until 2026. <br></p><p>It was, however, announced last month that the LTA will be abolished completely from 6 April 2023. This means that no one will face a LTA tax charge with the start of the new financial year. <br></p><p>As a result of the abolition of the LTA, the maximum amount most members can take as a lump sum will be frozen at £268,275, which is 25% of the current standard lifetime allowance of £1,073,100. However, members with a protected right to a higher lump sum on 5 April 2023 will continue to be able to access this right.</p><p><br></p><h2>How will I know if I’ve exceeded my allowances? </h2><p>If your pension savings in the RPS are greater than either the AA, or the MPAA, then we will send you a Pension Savings Statement (PSS). This will show how much of your allowance you have used. <br></p><p>You can apply to carry forward any AA that you haven’t used from the previous 3 years to the current tax year. However, no carry-forward is available for MPAA. </p><p>&nbsp;</p><h2>Making the most of your allowances</h2><p>With the challenging financial times we are all facing, making the most of your tax limits may not be a priority at the moment. Everyone’s situation is different, though, and it’s always helpful to know your options in case spending a little more towards your pension seems like a logical step. To get the most out of your limits, you might want to consider paying in as much as you can before the tax year is up. This doesn’t necessarily mean paying in the full allowance but paying in as much as you are able to at the time. </p><p>&nbsp;</p><h2>Enhance your understanding of the topic of tax</h2><p>You can find more details in our online <a href="/knowledge-hub/help-and-support/RAYN">Read as you Need guides</a>, as well as a <a href="/knowledge-hub/help-and-support/video-library">series of short videos</a>. <br></p><p>For more information on pension tax relief, check out the <a href="https://www.moneyhelper.org.uk/en" data-sf-ec-immutable="">Money Helper website</a> or try the <a href="https://www.which.co.uk/money/pensions-and-retirement/pensions-and-retirement-calculators/pension-tax-calculator-avRmf8S2yxd1" data-sf-ec-immutable="">Which? pension tax relief calculator</a>. It shows you how much tax relief you get based on your pension contributions.</p><p>&nbsp;</p><p><em>&nbsp;</em></p><p><em>We will be updating our website content and guides over the coming months to reflect the changes announced as part of the Spring Budget 2023, so please refer to this blog or </em> <a href="https://member.railwayspensions.co.uk/knowledge-hub/news-and-views/news-updates/2023/03/15/spring-budget-announcements" data-sf-ec-immutable="" data-sf-marked=""><em>this news article</em></a><em> in the meantime for the 2023-24 tax year figures.</em></p>

<p>It isn’t a cheerful topic, but it’s an important one - especially if you want to make sure the ones you care about are looked after. <br></p><p>In a nutshell, when you die, the ones closest to you could receive part of your pension benefits. However, who is eligible for what portion of it depends on a few quite important things:<br></p><ul><li>your membership status at the time of your death </li><li>their relationship to you prior to your death</li><li>whether they were included in your nomination or not<br></li></ul><p>We break it all down in this blog.</p><p>&nbsp;</p><h3>First things first – your membership status</h3><p>The benefits your family or dependants may receive depend on your membership status at the time of your death i.e. whether: <br></p><ul><li>you’re still paying into your pension (active member)</li><li>you’re no longer contributing towards your rail pension (preserved member), or </li><li>you’re already drawing it (retired member)<br></li></ul><p>Here’s a breakdown of what typically happens in each case:<br></p><h6>Active members <br></h6><p>If you die while you are still working and paying into the Railways Pension Scheme (RPS), the following death benefits could be paid out to the ones closest to you:<br></p><ul><li>A tax-free lump sum death benefit – this can be up to 4 times your pensionable salary, depending on the rules of the Section you’re a member of. For more information, check your member guide when you <a href="/my-rps">log into your myRPS account</a>. If you’ve saved extra with Additional Voluntary Contributions (AVCs), the value of your AVC pot may also be paid.<del cite="mailto:Hannah%20Blowers" datetime="2025-09-09T16:56"> </del></li><li>A spouse/civil partner’s pension - your spouse/civil partner could receive a pension from the Scheme upon your death. The amount they receive is normally around 50% of the pension you had built up at the time of death, though this percentage varies slightly depending on the Section you’re a member of. They will receive less pension if they are younger than you by 10 years or more. </li><li>Eligible child’s pensions - if certain criteria is met, pensions may also be paid to the two youngest dependent children. <a href="/my-rps">Check your member guide for more details</a><a id="_anchor_2" href="https://railpen-my.sharepoint.com/personal/jenny_prodanova_railpen_com/Documents/0.Personal/2025/Blogs/What%20happens%20to%20my%20pension%20when%20I%20die/TSR8159%20-HB%20&amp;amp;%20AYB%20comments%20(1)%20-%20Copy.docx#_msocom_2" name="_msoanchor_2" data-sf-ec-immutable=""></a>.</li><li>A dependant’s pension – this is paid to a person who depended on you financially for a minimum of 2 years prior to your death. The value of their pension may vary depending on circumstances and will reduce if the eligible dependant is younger than you by 10 years or more.<a id="_anchor_3" href="https://railpen-my.sharepoint.com/personal/jenny_prodanova_railpen_com/Documents/0.Personal/2025/Blogs/What%20happens%20to%20my%20pension%20when%20I%20die/TSR8159%20-HB%20&amp;amp;%20AYB%20comments%20(1)%20-%20Copy.docx#_msocom_3" name="_msoanchor_3"><br data-sf-ec-immutable=""></a></li></ul><h6>Preserved members<br></h6><p>If you’ve left railway employment but haven’t yet reached retirement age and are keeping your pension preserved in the RPS, there are death benefits that could potentially be paid to your dearest and nearest:<br></p><ul><li>A tax-free lump sum death benefit – this may be paid and will be based on the value of your preserved pension</li><li>A spouse/civil partner’s pension</li><li>Eligible child’s pensions</li><li>A dependant’s pension – may still be paid to a spouse, civil partner or eligible children&nbsp;</li></ul><h6>Retired members<br></h6><p>If you die after taking your pension and you pass away, the following death benefits may be paid:<br></p><ul><li>A tax-free lump sum death benefit – this may be paid only if you die within 5 years of retiring and haven’t received the full value of your pension yet</li><li>A spouse/civil partner’s pension will usually be paid – commonly around 50% of your pension.</li><li>Eligible child’s pensions </li><li>A dependant’s pension<br></li></ul><p>Rules vary by section, so check your member guide for more information – it’s in your myRPS account, under ‘My Library’.<br></p><p>There’s also some useful information on <a href="/defined-benefit-members/Im-taking-my-pension/my-pension-when-I-die">the my pension when I die page</a>.</p><h3>&nbsp;</h3><h3>Complete your nominations</h3><p>As a member of the RPS, you are part of one of the UK’s largest and most well-structured pension schemes – and that means your loved ones have a degree of security built in. <br></p><p>To make the most of it, make sure you complete and keep your nominations up-to-date. If you haven’t yet completed them, do it now! <br></p><p>By nominating, you essentially tell the Trustee of the RPS who you’d like to receive a lump sum death benefit in the event of your death. While it’s ultimately a decision of the Trustee, they will consider your wishes. <br></p><p>To nominate, <a href="/my-rps">log into your myRPS account</a><a id="_anchor_5" href="https://railpen-my.sharepoint.com/personal/jenny_prodanova_railpen_com/Documents/0.Personal/2025/Blogs/What%20happens%20to%20my%20pension%20when%20I%20die/TSR8159%20-HB%20&amp;amp;%20AYB%20comments%20(1)%20-%20Copy.docx#_msocom_5" name="_msoanchor_5" data-sf-ec-immutable=""></a>. You can check and update your nominations at any time in your online account.<br></p><p>You might want to inform your family about your RPS membership so they can consider it following your death. </p><p>&nbsp;</p><h3>Tax implications</h3><p>Lump sum death benefits are usually paid tax-free if: <br></p><ul><li>you die before age 75, and </li><li>within 2 years of the Trustee being notified of your death<br></li></ul><p>If you die after age 75 or the lump sum death benefits paid outside 2 years of the Trustee being notified of your death, beneficiaries may have to pay income tax on any lump sum received.<br></p><p>Pensions paid to spouses and/or children are taxable as income in the usual way.</p><div><div><div id="_com_1"><a href="https://railpen-my.sharepoint.com/personal/jenny_prodanova_railpen_com/Documents/0.Personal/2025/Blogs/What%20happens%20to%20my%20pension%20when%20I%20die/TSR8159%20-HB%20&amp;amp;%20AYB%20comments%20(1)%20-%20Copy.docx#_msoanchor_1" data-sf-ec-immutable=""></a></div></div></div>