Tesco pensions - Death benefits

April 2027 - Inheritance tax and pension changes

The Government has announced plans that from April 2027, some lump sum death benefits from pension schemes (and any unused defined contribution (DC) savings) may be included in the value of your estate for inheritance tax.

For our Scheme, this is expected to apply mainly to certain lump sum payments on death (for example, where a lump sum may be payable if you die within five years of starting your pension, or if you die before taking your pension or any extra money youve saved that hasnt been used yet). Other benefits, such as spouses or dependants pensions are expected to remain outside inheritance tax. This is a complicated area and the detail may change, so we recommend you seek advice if you think you may be affected. For further information on the changes, see www.gov.uk/inheritance-tax and for more details on getting advice, visit pensionwebsite.co.uk/guidance-and-advice.

We know that providing for your loved ones in the event of your death is important. Whether you die before or after you retire and start taking your Tesco Pension, death benefits could be payable from the Scheme. You might also be eligible for other death benefits from other pensions you hold, like the Tesco Retirement Savings Plan.

Cash lump sum

A cash lump sum, of five times the pension you've built up in the Scheme, could be payable if you die before you retire. If you die after you retire, but within five years of your Tesco Pension starting, the lump sum will be the sum of the remaining instalments of pension for the five year period.

The Trustees make the final decision as to who receives payment but they do take your wishes into account. It is therefore important to have an Expression of Wish and keep it up to date.

If your situation changes and you'd like to change the names on the form, even after you retire, complete the Expression of Wish form.

Expression of Wish form

Spouse or civil partners pension

A pension of 60% of your pension may also be payable for your spouse or civil partner for their lifetime.

If you don't have a spouse or civil partner, the Trustee may be able to pay a pension to your partner with whom you are in a marital type relationship, or to any individual who is financially dependent on you.

If your marriage or civil partnership took place within six months of your death, the pension payable to your spouse or civil partner may be reduced. Any reduction would only be confirmed once all required evidence has been received and the case has been considered under the Schemes discretion process. If a reduction applies, this will be clearly set out in the confirmation letter issued to your spouse or civil partner.

Child pension

The Scheme may also pay a child pension to eligible children under 16, or up to age 23 while still in full time education, or trustee-approved vocational training.

The pension is 25% of the pension you've built up for one child or a total of 40% for two or more children.

If you don't have a spouse or partner or any other dependant, the children's pension will be doubled.

Tell us about a death

If you need to tell us about the death of a member please call or email our Pensions Team who will go through the next steps with you.