An annuity death benefit is whatever you chose at purchase: a plain annuity stops when you die; a partner's income or a guarantee can pass money on.

Three things decide what an annuity leaves behind: whether the income stops, who can be paid instead, and how what they receive is taxed. All three are fixed on the day the annuity is bought, so this guide is for anyone weighing that choice and for anyone dealing with an annuity after a death. It gives the general UK position, not what one contract pays.

Pension Wise, from MoneyHelper, is free, impartial and backed by the government; its appointments are open from age 50, and earlier to anyone who has inherited a pension. How a partner's income, a guarantee or value protection would suit your household and other pots is for an FCA-authorised adviser to work through; the form on this page links you with one, without charge.

The short answer: a plain annuity stops when you die

MoneyHelper's guide to annuities says payments usually end at death unless the buyer chose a joint-life annuity or an optional protection. Aviva's own pension annuity page gives the same rule for its product: "If you choose for your annuity to just pay out while you’re alive, it’ll stop when you die."

Anything that carries on afterwards is chosen at the start: MoneyHelper says the optional protections have to be picked "when you first take out the annuity", and that each one usually lowers the income because the insurer is likely to be paying for longer. For an annuity that already exists, the contract decides, and the provider can say what it provides.

How an annuity works in general is in what a pension annuity is, whether one suits a given person in is an annuity worth it, and the comparison with leaving a pot invested in annuity or drawdown. Pots that were never turned into an annuity are covered in pension death benefits.

What an annuity can pay after you die

HMRC's Pensions Tax Manual lists what a lifetime annuity bought from a defined contribution pot can provide when the person it was bought for dies. There are three, and a contract can combine them:

  • a further annuity for dependants or nominees, which the manual says "is commonly called a joint-life annuity";
  • continued payments for the rest of a guarantee period; and
  • an annuity protection lump sum.

The manual adds that whether any of them is available "will be a question of fact under the terms of the contract". MoneyHelper describes the same three in everyday words, and one more.

A joint-life annuity: income for a partner

MoneyHelper says a joint-life annuity "pays a portion of your income to your dependants after you die". Its pensions-after-death guide puts it as a beneficiary who "will continue to receive a proportion of the income you were receiving". The proportion is set in the contract when it is bought, and Aviva's key features describe the cost as taking "a smaller income at the start, so that an income is paid to a dependant if you die before them".

Two limits are worth knowing. If the partner dies first, the joint-life part pays nothing. And the cover need not be for a spouse: HMRC's manual speaks of "dependants or nominees", and the contract sets out who is covered. How the cover is priced and compared is the subject of joint life annuities.

A guarantee period: payments for a set time

A guarantee period keeps income going for a minimum time even if you die early. MoneyHelper says beneficiaries can receive an income for up to 30 years after the death, or a lump sum of the same value. In its example, someone with a 10-year guarantee who dies after 7 years leaves the remaining 3 years to their beneficiary, either way.

Aviva's key features say its annuity "usually has a one-year guarantee period as standard", and that a buyer can choose "a longer guarantee period of up to 30 years, or 10 years if your annuity was purchased by the trustees of a defined benefit pension scheme". For annuities bought on or after 6 April 2015, HMRC's manual says a guarantee can be "of any duration"; before that date it could not exceed ten years. Once the period has ended, MoneyHelper says, "your annuity will still stop".

Value protection and what Aviva's key features say

Value protection is aimed at the person who dies soon after buying. MoneyHelper says it "pays your beneficiaries a lump sum if your annuity has paid out less than it cost you when you die". On its figures, value protection on a £50,000 annuity that had paid £30,000 by the date of death leaves the beneficiary £20,000. HMRC calls the same thing annuity protection and says that the most it can provide "is the capital value of the lifetime annuity benefit that crystallises. This will be the purchase price of the annuity." MoneyHelper also lists a smaller option, "with proportion", which pays the income due for the days between the last payment and the death.

Aviva's key features (AN15036) include value protection as standard for the first 90 days from your plan start date, with a lump sum equal to the price paid "less any payments already made". The optional extension covers "up to 100% of the price paid", for life or a set term, and pays only "if there are no annuity payments continuing to a dependant"; choosing it means the standard one-year guarantee period no longer applies. Remaining guarantee payments "will normally be paid as set out in your will and form part of your estate". These are Aviva's terms for its own annuity; other providers set their own, and Aviva's options are covered in how Aviva annuities work.

Where a guarantee and a joint-life income are both chosen, MoneyHelper says you can normally choose whether the payments run at the same time, called overlap, or one after the other; that detail is in annuity overlap explained, and the two features together are in joint life annuity guarantee periods.

Each of these has a price, because each makes it more likely the insurer will pay out. Weighing a smaller income now against something to leave behind depends on a partner's needs, other pensions and how much someone wants to pass on. Pension Wise is the free place to start. For the wider picture, that trade can be talked through with an FCA-authorised adviser once the form on this page has gone in.

Tax on what a beneficiary receives

For income tax, what matters is how old the annuity holder was at death, not the beneficiary's age. GOV.UK's table for tax on a private pension you inherit shows, for an annuity from a defined contribution pot where the owner died under 75, "No tax". Where the owner was 75 or over, the provider deducts Income Tax. MoneyHelper's guide to pensions after death says the under-75 position applies where the beneficiary receives income "from an annuity that was set up after 6 April 2015".

  • A joint-life income to a partner. Usually tax-free where the annuity holder died under 75 (HMRC's technical note says survivors' annuities "are usually tax-free" in that case), with Income Tax deducted by the provider where they were 75 or over.
  • Guarantee-period payments. HMRC's manual says the person receiving them is taxed as the annuitant was, "unless all of the following points apply": the annuitant died after 2 December 2014 and before reaching 75, and any payments made before 6 April 2015 went to the annuitant, including under an earlier contract if the annuity was transferred between insurers. If all apply, "the guarantee payments are tax-free". For an annuity that was paying before April 2015, the provider can confirm the position.
  • Lump sums, such as value protection. GOV.UK lists annuity protection among lump sum death benefits. Where the owner died under 75, the table shows no tax unless the lump sum goes over the owner's lump sum and death benefit allowance; at 75 or over the provider deducts tax. GOV.UK ties that allowance to "certain lump sum death benefits" (the annuity row carries no such condition) and puts it at up to £1,073,100; tax-free cash the owner took in life uses some of it, and a protection can raise it.

One more condition applies to a lump sum from someone who died under 75: paid more than 2 years after the provider is told of the death, the whole of it is taxed as income, GOV.UK says. Where tax is due, the provider normally deducts it before paying, and it is added to the beneficiary's other income that year; how inherited pensions are taxed covers the detail.

Inheritance tax on annuity payments after death

Income tax falls on the person who receives the money; inheritance tax is charged on the estate. The inheritance tax rules for pensions are changing, and this is now law rather than a proposal: the Finance Act 2026 received Royal Assent on 18 March 2026. Sections 66 to 70 make the change, and section 71 applies it to deaths on or after 6 April 2027. The full position is in pensions and inheritance tax.

For an annuity the answer turns on what it pays after death:

  • Deaths before 6 April 2027. MoneyHelper says that until April 2027 pension money or death benefits a scheme promises "will not usually be counted when calculating Inheritance Tax". GOV.UK gives the reason for lump sums: payment is usually "discretionary", meaning the provider chooses whether to pay.
  • An annuity that just stops. In a worked example in HMRC's second technical note, an annuity that ended when its holder died is valued by the provider at £0.
  • A partner's or nominee's annuity. HMRC's first technical note says an annuity for a dependant or nominee, if it was bought together with the member's lifetime annuity, is an excluded benefit, left out of the estate's pension value; the person receiving it need not have been a dependant.
  • Guarantee payments. The same note says its valuation brings payments under guarantee provisions into scope, and explains that where a member dies within the first 10 years of becoming entitled to a pension or annuity, payments may continue to a beneficiary until the end of that period.

Where the deceased held an annuity from an insurance company, the note says the personal representative asks the insurer for a valuation of any "notional pension property". Exemptions, and who reports and pays, are in the inheritance tax guide linked above.

Annuity death benefit questions

Can an annuity be inherited, and who gets it?

Only in the way the contract allows. MoneyHelper says any annuity income or lump sum "is only payable to the people you named when you set it up", so a joint-life partner or the beneficiaries of a guarantee or value protection are fixed at purchase. Under Aviva's terms, remaining guarantee payments go "to your estate or dependant".

What happens to a fixed-term annuity if I die before it ends?

MoneyHelper says the maturity amount "is often paid to your nominated beneficiaries. But always check, as death benefits vary between schemes." The product itself is explained in fixed-term annuities.

What happens if I die soon after buying an annuity?

Without value protection, a guarantee or a joint-life income, the payments simply stop, and Aviva's key features warn that "If you die in the early years, the total Pension Annuity (including the Enhanced Pension Annuity) payments you’ve received may be less than the pension fund used to buy it." Other providers' terms differ, so their key features document is where to look.

Does an enhanced annuity pay more to my family when I die?

Not by itself. In Aviva's key features, an enhanced annuity is one where a serious medical condition that could shorten life expectancy may qualify for a higher income; any payment to a partner or beneficiary comes from the options above, chosen separately. How health affects income is in enhanced annuity rates.

Can I cash in an annuity to leave the money to my family?

That is a different question from what happens at death, and it has its own page: can I withdraw from my annuity.

Your next step

What your annuity leaves behind, and who pays tax on it, is decided by the options chosen on the day it was bought, by the age at death and, from April 2027, by the rest of the estate. The provider's key features and Pension Wise cost nothing to check. To have an annuity's death options, your other pensions and your family's tax considered together, sketch the annuity in the form on this page; following that, an FCA-authorised adviser gets in touch.

Sources, accessed 18 October 2026: MoneyHelper, annuities explained, MoneyHelper, what happens to my pension when I die and MoneyHelper, Pension Wise (read via the Internet Archive); GOV.UK, Tax on a private pension you inherit and Lump sum allowance; HMRC, Pensions Tax Manual PTM062400 and Technical note: Inheritance Tax on pensions and Technical note 2; Finance Act 2026, section 71; Aviva, pension annuities and its Pension Annuity key features (AN15036, October 2025).