The benefits from undrawn (officially called uncrystallised) pension funds don’t die with you.
Instead, they can be passed on to any qualifying spouse/civil partner, dependants or your chosen beneficiaries.
The rules regarding what happens to your pension funds after your death are complicated by certain factors.
The exact options available to your qualifying spouse/civil partner, dependants or chosen beneficiaries, any tax liability and consequently, the eventual value of the pension funds left over will be mainly dependant upon:
your age when you die (the rules are different for those under and over 75 years old),
whether the benefits are coming from Protected Rights or Non Protected Rights pension funds and
the Lifetime Allowance Test.
It might be possible for your remaining pension funds to be paid out as a cash lump or it could be that the only choice is that they are used to provide an income.
In some circumstances, they can be given to a charity.
For more precise information, click the links below:
Capped Drawdown Death Benefits Options
Capped Drawdown: Spouse’s & Dependant’s Options
If after reading the above, you are finding it hard to understand how the death benefits from undrawn or uncrystallised pension funds can be taken or distributed, you can always seek help from an Independent Pensions Adviser.