Views:

This depends on:

  • which Section or Scheme the member was contributing to at the time of their death
  • if the member was an officer or a practitioner
  • if the member died while in active NHS employment

Follow the guidance for:

You can read more information on our Survivors Guide on our website.

1995 Section

The same year’s pensionable pay used for the dependant’s benefits must also be used for the lump sum on death.

Officers

To calculate the lump sum, we look at the last 3 year's pensionable pay up to the date of death or the member’s last day of membership, whichever is later.

Death of a pensioner

Lesser of either:

  • 5 times the annual pension, minus any pension already paid
  • 2 times the actual pay at retirement, minus the lump sum paid

Death in pensionable membership

2 times the best of the last 3 years actual pensionable pay.

Death with deferred pension

3 times the deferred annual pension.

Practitioners

The lump sum on death benefit is twice the career average uprated earnings.

2008 Section

The same years reckonable pay used for the dependant’s benefits must also be used for the lump sum on death.

To calculate the lump sum, we look at the best 3 consecutive years from the last 10 years of pensionable pay.

This is taken from the member’s date of death or last day of service, whichever is later. We average those best 3 years to calculate the annual reckonable pay.

This is revalued by the increases in inflation. Whichever year is the highest is usually used in the calculation.

Officers

Death of a pensioner

Lesser of either:

  • 5 times the annual pension, minus any pension already paid
  • 2 times the actual reckonable pay at retirement, minus lump sum paid

Death in pensionable membership

2 times the actual reckonable pay.

Death with deferred pension

 2.25 times the deferred annual pension.

Practitioners

2 times the average uprated practitioner pensionable income.

2015 Scheme

Death of a pensioner

Lesser of either:

  • 5 times the actual annual pension, minus pension already paid
  • the lump sum on death that would have been payable if the member died on the last day of pensionable employment as an active member, minus any lump sum already paid

Death in pensionable membership

The highest of either:

  • 2 times the relevant earnings within the last 12 months
  • 2 times the revalued pensionable earnings for the Scheme year, up to 10 years earlier with the highest revalued pensionable earnings

If the member has less than 365 days membership, the earnings used are built up to 365 days using the amount already earned.

Death with deferred pension

2.025 times the deferred annual pension at the date of death.

Tax

We must deduct the tax charge of up to 45% if the lump sum is paid more than 2 years after we're officially told of the member’s death.

If you have any queries about the tax charge, write to HM Revenue and Customs (HMRC) at:

Pension Scheme Services
HM Revenue and Customs
Ferrers House
Castle Meadow Road
Nottingham
NG1 1BB

If you have any questions about Inheritance Tax, you can find contact details for the Capital Taxes Office on their website.