Will my pension support my spouse/partner/dependents when I die?

This will depend on what type of pension you have, and whether you die before or after you have started to claim your pension.

Occupational Pensions

If you die while still working for the organisation that provides the pension, then there is a range of different pensions or cash sums that may pass to your dependents:

• Death in service benefitThis is usually a multiple of your salary and can be up to a maximum of four times what you are earning when you die. It is very similar to a life assurance policy, and is often provided by both salary related and money purchase schemes. Most schemes allow you to nominate somebody who should get the benefit, but legally the trustees of your scheme decide who gets the money. Your scheme rules will state the exact amount of the death in service benefit and how to nominate who will get the benefit. If there is a change in your personal circumstances then you should not forget to tell your scheme so you can be sure the benfit goes where you wish.

• Refund of contributions   In a money purchase scheme there will be a refund of the value of your pension pot – ie the value of your contributions plus the growth in their value achieved through their investment. If the scheme is contracted out then a small pension will be payable to a surviving spouse, as this is one of the conditions for being allowed to contract out. In a final salary scheme you should normally get back the value of your contributions, and in a good scheme a pension might be paid to your dependent from the day that you would have retired if you had survived. It can be up to two-thirds of the pension you would have drawn. You will need to check the rules of your scheme to find out what is available. 

If you die after you have stopped working for the employer who provides the scheme but before you start to draw a pension from it, you are what is known as a deferred member of a scheme. It is unusual for deferred members to get death in service benefits, though they should have rights to contribution refunds - and survivor's pensions - similar to current scheme members when they die.

After you have started to draw a pension all this changes.

There are two kinds of payment your surviving dependents may get:

• Most pension schemes have something called a guarantee period.  If you die within the guarantee period (often five years, but sometimes more) the remaining unpaid pension instalments are paid to a beneficiary, tax-free as a lump sum. Sometimes the amount paid is reduced as the payments are early.
• With final salary schemes, the level of pension payable to a surviving partner is set by the rules of the scheme. Normally it is half the member's pension. The rules of the scheme may limit who can be your partner. Spouses are always covered – unmarried partners (of either sex) who are genuine partners will be covered by good schemes. It's probably a good idea when unmarried partners are involved to let the scheme know of your domestic arrangements as early as possible. Your scheme may have a formal nomination process.
• With money purchase schemes, the pension comes from the annuity you buy. You can choose the level of surviving partner's pension when you buy the annuity – or indeed that there should not be one at all. Of course the higher the level of survivor's pension provided by your annuity, the lower your pension will be before you die.

There's more about this on the Occupational Pensions Advisory Service (OPAS) website.

Personal pensions

If you die after using your pension fund to buy an annuity, then the survivor's benefits will depend on the kind of annuity you bought. You can choose the level of surviving partner's pension when you buy the annuity – or indeed whether there should be one at all. Of course the higher the level of survivor's pension provided by your annuity, the lower your pension will be before you die.

If you die before you buy an annuity your pension pot can pass to a dependent (though there may be tax to pay).

You used to have to use all of your pension fund to buy annuities before you are 75. This has now changed and you can draw money from the pot instead. Any residue left when you die can be passed on to a dependant (though there may be tax to pay). This is a complex area, and many of these options are only likely to suit the well-off.