> Source: https://swiftwill.co.uk/life-insurance-and-pensions-and-your-will/ — SwiftWill, first published 24 September 2026, updated 24 September 2026. This Markdown mirror is generated at build time from the page's HTML. General information for England and Wales, not legal advice.

# Life insurance, pensions and your will

By [SwiftWill](https://swiftwill.co.uk/about/) · Updated 24 September 2026 · England and Wales

Quick answer

Several valuable assets usually pass outside your will: life insurance written in trust, most pension death benefits, money in joint accounts and property owned as joint tenants. Your will cannot override a policy trust, a pension scheme's decision or survivorship, so each needs to be checked on its own terms. From 6 April 2027, most unused pension funds will also count towards the estate for inheritance tax.

## Which assets pass outside your will?

Anything that passes by nomination, by a separate trust or by survivorship goes to the recipient without passing through your will. Your executors still need to know about these assets, because many count when the estate is valued for inheritance tax.

How common assets pass on death in England and Wales
| Asset | Who decides who gets it | Inheritance tax position |
| --- | --- | --- |
| Life insurance written in trust | The policy trust and its trustees | Treated like other settled property, not your free estate |
| Life insurance not in trust | Your will (paid to your estate) | Part of your estate |
| Pension death benefits | The scheme, usually guided by your nomination | Usually outside the estate for deaths before 6 April 2027; most included from that date |
| Joint bank accounts | Survivorship: the surviving holder, unless agreed otherwise | The deceased's share counts |
| Property owned as joint tenants | Survivorship: the surviving owner | The deceased's share counts |
| Property owned as tenants in common | Your will, for your share | Your share counts |

Sources for the table are listed at the end of this page. For the property rows, see [joint tenants vs tenants in common](https://swiftwill.co.uk/joint-tenants-vs-tenants-in-common/).

## How does life insurance written in trust work?

When a life policy is written in trust, the right to the payout belongs to the trust, and the trustees claim it and pay it to the beneficiaries named in the trust. HMRC's Inheritance Tax Manual ([IHTM20012](https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm20012)) explains the contrast:

-   If you own a policy on your own life and it is not in trust, the proceeds form part of your estate, pass under your will and are taxable on your death. Insurers usually wait for proof of title, normally the grant of probate, before paying ([IHTM20211](https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm20211)).
-   A policy held in trust is treated like other settled property. Paying premiums on a policy held for someone else can count as a gift, although exemptions such as normal expenditure out of income may apply.

So the beneficiaries of the policy trust, not the beneficiaries of your will, receive the money. If the trust names your children but your will now provides for a new partner, the two documents pull in different directions. Ask your insurer for a copy of the trust deed and check who the trustees are: they need to be alive, willing and able to claim.

## How are pension death benefits paid?

Pension schemes pay death benefits under their own rules. GOV.UK's guide to [tax on a pension you inherit](https://www.gov.uk/tax-on-pension-death-benefits) says the person who died will usually have nominated who should receive money from their pension pot, but the provider can sometimes pay someone else, for example if the nominee cannot be found or has died. HMRC's [policy paper on pensions and inheritance tax](https://www.gov.uk/government/publications/inheritance-tax-unused-pension-funds-and-death-benefits/inheritance-tax-unused-pension-funds-and-death-benefits) notes that most UK pension schemes are discretionary: the administrator or trustees decide, and your nomination (often called an expression of wish) guides them.

-   **Defined contribution pots** can be paid as a lump sum, an annuity or drawdown income, depending on the scheme's rules.
-   **Defined benefit (final salary) pensions** can usually only pay a continuing pension to a dependant, such as a spouse, civil partner or child under 23, according to GOV.UK.
-   **Income tax** depends mainly on age at death. Most lump sums paid when the member died under 75 are tax-free within the lump sum and death benefit allowance (usually £1,073,100) and paid within two years of the provider learning of the death. If the member died at 75 or over, the provider deducts income tax before paying.

A sentence in your will such as "I leave my pension to my daughter" does not bind the scheme. If a scheme pays benefits to your estate, for example because there is no one else, they then pass under your will like any other asset.

## What changes for pensions and inheritance tax from 6 April 2027?

[Section 66 of the Finance Act 2026](https://www.legislation.gov.uk/ukpga/2026/11/section/66) adds a new section 150A to the Inheritance Tax Act 1984, treating a scheme member as entitled to their unused pension funds and death benefits immediately before death. Section 71 applies this to deaths on or after 6 April 2027. HMRC's policy paper says:

-   most unused pension funds and death benefits will count towards the estate, whether or not the scheme has discretion;
-   death-in-service benefits from registered pension schemes, and dependants' scheme pensions from defined benefit arrangements, are excluded;
-   the existing exemptions for benefits passing to a surviving spouse or civil partner, or to charity, are kept;
-   personal representatives, not pension schemes, will be responsible for reporting and paying any inheritance tax due on pensions.

For many families this makes the pension nomination part of inheritance tax planning as well as a question of who receives the money. Our [inheritance tax calculator](https://swiftwill.co.uk/tools/inheritance-tax-calculator/) gives a rough view; estates near the thresholds should take advice.

## What happens to joint accounts and jointly owned property?

GOV.UK's [probate guidance](https://www.gov.uk/applying-for-probate) says shares or money owned with others automatically pass to the surviving owners unless they have agreed otherwise, and land or property owned as joint tenants passes to the surviving owners too. That is useful, because the survivor can reach the money without waiting for probate, but it also means your will cannot redirect it.

The deceased's share still counts for inheritance tax. HMRC's [valuation guidance](https://www.gov.uk/valuing-estate-of-someone-who-died/estimate-estate-value) says to divide a joint account by the number of holders, unless it was in joint names only for convenience, such as a parent adding a child to help manage it, in which case the amount the person actually owned is used. See [bank accounts after a death](https://swiftwill.co.uk/bank-accounts-after-death/) for how banks handle this.

## How do you keep these assets in line with your will?

1.  **List everything and how it passes.** For each pension, policy, account and property, note whether it follows the will, a nomination, a trust or survivorship. Our [executor handover template](https://swiftwill.co.uk/executor-handover/) is a private place to record where the documents are.
2.  **Check every pension nomination.** Ask each scheme what nomination it holds and when it was made. Update it through the scheme after a marriage, separation, divorce, new child or death in the family.
3.  **Check every life policy.** Find out whether it is written in trust, who the beneficiaries and trustees are, and whether anything has changed since it was set up.
4.  **Make the will fit around them.** Your residuary estate is what is left after these assets pass elsewhere. If most of your wealth is in a pension or a policy trust, the will may control much less than you think, and equal treatment of children may need the will to compensate.
5.  **Think about who needs money quickly.** A surviving partner may need income before probate is granted. Joint accounts and policies in trust can help; assets in your sole name usually wait for the grant (see [do I need probate?](https://swiftwill.co.uk/probate/do-i-need-probate/)).
6.  **Review after life events.** Divorce changes how your will treats a former spouse under [section 18A of the Wills Act 1837](https://www.legislation.gov.uk/ukpga/Will4and1Vict/7/26/section/18A), but nominations and policy trusts follow their own terms. Marriage revokes an existing will unless it was made in contemplation of that marriage; see [does marriage revoke a will?](https://swiftwill.co.uk/does-marriage-revoke-a-will/)

## What does SwiftWill's will cover?

SwiftWill's will deals with the assets that pass under a will: your share of property as a tenant in common, sole-name savings and investments, possessions, and any policy or pension money paid into your estate. It can record the digital assets your executors should know about. It does not change pension nominations, set up or amend life insurance trusts, or give tax advice, and a will cannot do those things in any case. For the wider checklist, see [what a will does not cover](https://swiftwill.co.uk/what-a-will-does-not-cover/). If your situation is straightforward, you can [start your will](https://swiftwill.co.uk/start/) and preview it free.

## Sources

-   [HMRC IHTM20012](https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm20012) and [IHTM20211](https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm20211) (life policies and inheritance tax)
-   [GOV.UK: Tax on a private pension you inherit](https://www.gov.uk/tax-on-pension-death-benefits)
-   [GOV.UK: Individual lump sum allowances](https://www.gov.uk/guidance/find-out-the-rules-around-individual-lump-sum-allowances) (lump sum and death benefit allowance)
-   [HMRC policy paper: Inheritance Tax, unused pension funds and death benefits](https://www.gov.uk/government/publications/inheritance-tax-unused-pension-funds-and-death-benefits/inheritance-tax-unused-pension-funds-and-death-benefits)
-   [Finance Act 2026, sections 66 to 71](https://www.legislation.gov.uk/ukpga/2026/11/section/66)
-   [GOV.UK: Applying for probate](https://www.gov.uk/applying-for-probate) (joint assets)
-   [GOV.UK: Estimate the estate's value](https://www.gov.uk/valuing-estate-of-someone-who-died/estimate-estate-value) (joint assets)
-   [GOV.UK: Joint property ownership](https://www.gov.uk/joint-property-ownership)
-   [Wills Act 1837, sections 18 and 18A](https://www.legislation.gov.uk/ukpga/Will4and1Vict/7/26/section/18A)

Sources checked 24 September 2026.

## Frequently asked questions

**Does my will cover my pension?**

Usually not. Most pension death benefits are paid by the scheme under its own rules, and in most schemes the administrator or trustees decide who receives them, using your nomination as a guide. Update your nomination with each scheme rather than relying on your will.

**Does life insurance go through my will?**

Only if the policy is not written in trust. A policy you own on your own life that is not in trust pays into your estate, so it passes under your will and counts for inheritance tax. A policy written in trust is paid to the trustees for the beneficiaries named in the trust.

**Can my will override a pension nomination?**

No. The pension scheme, not your will, decides how death benefits are paid, and a gift of your pension in a will does not bind the scheme. If your wishes change, tell the scheme directly and keep your will consistent with what you have told it.

**Will my pension be subject to inheritance tax?**

For deaths before 6 April 2027, lump sums paid at the scheme's discretion are usually outside inheritance tax. Finance Act 2026 brings most unused pension funds and death benefits into the estate for deaths on or after 6 April 2027. Death-in-service benefits from registered schemes are excluded, and benefits passing to a spouse, civil partner or charity keep their exemptions.

**Do joint bank accounts go through a will?**

Generally not. GOV.UK says money owned with others automatically passes to the surviving owners unless they have agreed otherwise. The deceased's share still counts when the estate is valued for inheritance tax.

**Does divorce cancel my pension nomination?**

Do not assume so. Section 18A of the Wills Act 1837 treats a former spouse as having died for the purposes of your will, but that rule applies to wills. Pension nominations and life insurance trusts follow their own terms, so check and update each one after a divorce.

Published by SwiftWill. First published 24 September 2026; updated 24 September 2026. General information for England and Wales, not legal advice. Sources are linked in the guide; publication is not an individual legal review. Spotted an error? See our [corrections log](https://swiftwill.co.uk/corrections/).