The death grant payable for pensioners is a reducing amount as it takes account of pension that has already been paid. The information boxes below explain how the death grant is calculated depending on when you left the Scheme and claimed your benefits. If you die while receiving an LGPS (NI) pension but you are also an active member of the Scheme, only the highest death grant will be payable, not the sum of all the death grants.
| Date left | Details |
|---|---|
| Left the Scheme after 31 March 2015 | For Membership from 1 April 2015 The death grant is ten times your annual pension (before any pension you may have given up for a tax-free cash lump sum), minus any pension already paid to you for your post 31 March 2015 membership and the amount of any tax-free cash lump sum that you chose to take by giving up some of the pension built up after 31 March 2015. For Membership before 1 April 2015 The death grant is ten times your annual pension for your membership before 1 April 2015 (after any pension you may have given up for a tax-free cash lump sum), minus any pension already paid to you for your pre-1 April membership. If you have more than one period of membership with NILGOSC There is no limit to the number of death grants payable for pensions already in payment or deferred pensions you may have except if you were also still in employment and an active member of the scheme at your date of death. In these cases the higher amount of either the active death grant or the aggregate of any pensioner and/or deferred death grants would be paid. |
| Left the scheme between 1 April 2009 and 31 March 2015 | In most cases a death grant is payable of ten times the pension in payment less the total amount of pension already paid. This is known as a ten year guarantee. |
| Left the scheme before 1 April 2009 | In most cases a death grant is payable if you have been on pension less than five years. The death grant is the sum of five years basic pension reduced by the total basic pension already paid. This is known as a five year guarantee. Slightly different calculations apply if you left the Scheme before 1 August 2000. |
Payment of death grant
You can nominate who you would like your death grant and/or proceeds from your AVC fund to be paid to in the event of your death. This can be done via My NILGOSC Pension Online or you can complete and return an Expression of Wish Form LGS20 (879KB, PDF). All members are strongly advised to make a nomination and to ensure that it is kept up to date, especially if your circumstances change.
Under the regulations, NILGOSC retains absolute discretion on the allocation of any death grant. When exercising its discretion, NILGOSC will consider any nomination that you have made.
Inheritance Tax Changes from 6 April 2027
The UK Government has changed the inheritance tax treatment of some pension death benefits.
For deaths occurring on or after 6 April 2027, unused pension funds and certain pension death benefits may be included when calculating the value of a deceased member’s estate for Inheritance Tax purposes. This represents a change from the previous position where discretionary pension death benefits were generally outside the scope of Inheritance Tax.
Benefits paid to a surviving spouse or civil partner continue to be exempt from Inheritance Tax under the current legislation.
NILGOSC cannot provide financial or tax advice. If you are concerned about the impact of these changes on your estate planning arrangements, you should consider seeking independent financial advice.
Will my death grant be subject to Inheritance Tax?
From 6 April 2027, certain pension death benefits may be included in the value of a deceased person’s estate when Inheritance Tax is calculated. Whether any tax is payable will depend on the value of the estate and the individual circumstances of the beneficiaries.
Will NILGOSC be able to tell me whether Inheritance Tax will be payable?
No. NILGOSC cannot provide financial or tax advice and cannot determine whether Inheritance Tax will be payable in an individual case. Pensioners who are concerned about the impact of these changes on their estate planning arrangements should consider obtaining independent financial advice.