She Turns 23 In March And The Pension Stops

Can a child inherit a pension? Yes — but whether yours can, and how much they receive, turns almost entirely on one number: their age when you die, and specifically whether they have reached 23. Under 23, a child is treated as a dependant automatically, which opens up the full range of pension death benefits without you having to do anything. From the day they turn 23, that automatic status falls away, and an adult child usually inherits nothing from a pension unless you have named them on the form.

That is the cliff edge this page is about. It catches two kinds of family. The first is a couple with a pot of money in a pension, who assume the children are covered and never fill in the form. The second is a family already receiving a children's pension — a monthly income paid to a son or daughter after a parent has died — which quietly stops on a birthday, often while that child is still at university and still depends on it.

Neither group is warned. The rule sits in the small print of the pension tax system and the scheme booklet, and it does its work silently. Here is where the line falls, and what you can do before it does.

The short answer: everything hinges on age 23

For pension death benefit purposes, the tax rules draw a hard line at a child's 23rd birthday. Below it, a child is a dependant. At or above it, a child is not a dependant unless they were dependent on you because of a physical or mental impairment. That single distinction decides whether a pension can pay them as of right, or only if you have taken a deliberate step to include them.

It feels arbitrary, and in a sense it is — 23 is roughly the age by which someone is expected to have left full-time education and become self-supporting. But the rule does not ask whether your particular child is actually independent. It applies by date of birth. A child three months short of 23 and a child three months past it are treated as different categories of person, even if their lives look identical.

Because the answer depends on what kind of pension you have, it helps to separate two questions that often get muddled together.

Two pensions, two different rules

When people ask whether a child can inherit a pension, they are usually asking one of two quite different things, and the age-23 rule bites differently on each.

The first is a defined contribution pension — a pot of money in your name, such as a personal pension, a workplace pension or a self-invested personal pension. On death, that pot can be paid out as a lump sum or kept invested for a beneficiary. Whether a child can receive it, and in what form, depends on whether they count as a dependant or a nominee.

The second is a defined benefit scheme — a final salary or career average pension, common in the public sector and older company schemes. These often pay a separate children's pension: a regular income for a member's children after death, quite apart from any survivor's pension for a spouse. That income runs for as long as the scheme's rules allow, and stops when the child ages out.

The same child can be caught by both. A parent might leave a defined contribution pot that an adult child can only touch if named, and a defined benefit children's pension that ended the day that child left university. Understanding which scheme is which is the first job, and if you are not sure, our guide to identifying which scheme a member was actually in shows how to read it from payslips and service dates.

Under 23: your child is a dependant automatically

While a child is under 23, the pension rules treat them as a dependant. For a defined contribution pot, that matters in two ways. It means the trustees can pay them death benefits without you having named them, and it means they can be offered the flexible options — including keeping the money invested as a dependant's drawdown fund and drawing an income from it — rather than being limited to a single lump sum.

This is the more forgiving side of the cliff. A younger child is not left out by an unfilled form, because their dependant status does the work a nomination would otherwise do. The trustees still have discretion over who receives a discretionary lump sum, so naming your children remains the sensible thing to do — it tells the trustees plainly what you wanted — but a child under 23 is not shut out of the death benefits simply because they were never written down.

Tax follows the usual pattern. If you die before 75, benefits paid to the child within two years are normally free of income tax. If you die at 75 or over, the child pays income tax at their own marginal rate on what they take, which is one reason the ability to keep the money in drawdown and spread withdrawals across years, rather than taking it all as one taxable lump sum, can matter so much. Whether a child is offered that choice at all depends on how the nomination form was completed.

Over 23: your child becomes a nominee who has to be named

The day a child turns 23, and assuming they are not dependent on you through disability, they stop being a dependant and become — in pension terms — an ordinary adult. For a defined contribution pot, that changes everything about what they can receive.

An adult child over 23 can generally only inherit a pension pot if you nominated them as a beneficiary. Without a nomination, they are not entitled to anything, and they depend entirely on the trustees' discretion. Where you have a surviving spouse, or where you named someone else, an unnamed adult child can be passed over completely. This is the outcome families least expect: the assumption that "it goes to the children" holds for a will, but a pension held under trust does not follow the will, and an unnamed adult child has no automatic claim on it at all.

Naming them also does more than get them included. It can determine whether they are offered the income route rather than a lump sum — an adult child usually needs to have been nominated to be offered beneficiary drawdown, and without it may be handed the whole pot as cash, taxable in one year if you died at 75 or over. If your intention is that grown-up children share a substantial pot, the practical realities of what children actually inherit from a pension, and how quickly they can turn it into money, are worth thinking through before you assume cash is what they want.

The children's pension that ends on a birthday

The version of this that hurts most is the defined benefit children's pension, because it is a live income a family is already spending, not a one-off pot. When a member of a final salary or public service scheme dies leaving children, many schemes pay each eligible child a pension — a regular monthly amount — on top of anything paid to a surviving spouse.

The catch is eligibility. A children's pension typically runs while a child is under a certain age, and can continue to a higher age only while the child stays in full-time education or vocational training. The exact ages and conditions are set by the scheme, not by a single national rule, but the upper limit commonly sits around 23. So a family relying on a children's pension to help a daughter through university can find it stops on the term she turns 23, or the day she graduates, whichever the scheme specifies — an income disappearing at precisely the point tuition and rent are still being paid.

Because these rules are scheme-specific, the only reliable answer comes from the scheme booklet or the administrator. Ask two questions in writing: at what age or event does the children's pension stop, and does full-time education extend it. Schemes such as the local government scheme have their own conditions, and a family owed money from an old employment may not even realise a children's pension exists — our guide on what a deferred local government pension pays a family shows how easily these entitlements are forgotten.

Who counts as your child, and what to do before the cliff

Before you rely on any of this, check who the scheme actually treats as your child. Biological and legally adopted children are normally included without question; an adoption order gives a child the same status as a birth child for these purposes. Step-children and children you are bringing up but have not adopted are a different matter — some schemes include a child who was financially dependent on the member, others do not, and the difference can decide whether a grieving household keeps an income at all.

The practical steps are the same whichever pension you hold. Ask each pension provider or scheme administrator, in writing, for a copy of your current nomination or expression of wish, and for the rules on children's benefits. Make sure every child you want to benefit is named. If your children are young, remember that a lump sum paid to a minor cannot simply be handed over — how money is held for a child who cannot legally receive it is a problem in its own right, as our piece on a child who would inherit but cannot yet own it explains.

Where a children's pension or a dependant's pot will stop before your children are truly independent, the gap it leaves is exactly the kind of thing life cover is designed to bridge — a policy that pays your family directly, on your terms, regardless of a scheme's age limits. You can get life insurance quotes and have an FCA-authorised broker size cover against the years your children will still depend on you. Free, independent guidance on understanding your own pensions is available from MoneyHelper, which is government-backed. The wider picture is set out in our guide to pensions, nominations and death benefits.

Scotland and Northern Ireland

The pension tax rules that make a child under 23 a dependant, and an older child a nominee, apply across the whole of the UK, so the age-23 line itself does not move between England, Wales, Scotland and Northern Ireland. What varies is what sits around it.

Defined benefit schemes set their own definitions of an eligible child and their own age limits, and a Scottish or Northern Irish scheme can word these differently from a scheme covering the rest of the UK — another reason to read the specific booklet rather than a general summary. Income tax on any taxable pension benefit also differs for a beneficiary resident in Scotland, where the rates and bands are set separately, so the tax a Scottish-resident adult child pays on an inherited pot can differ from that paid elsewhere. And where a pension death benefit is paid at the trustees' discretion, it generally falls outside the deceased's estate, which keeps it clear of the succession rules — including Scotland's legal rights for children — that would otherwise give a child a claim. None of that changes the birthday at the centre of it: the surest protection is to check the form and the scheme rules while there is still time to act on what they say.

Frequently asked questions

At what age do children's pension benefits stop?

For pension death benefit purposes a child under 23 counts as a dependant. Above that age a child usually only qualifies if they are dependent because of a physical or mental impairment. Individual schemes may also stop children's pensions earlier or require the child to remain in full-time education for the benefit to continue, so the exact cut-off is set by the scheme rather than by a single national age.

Can I still leave my pension to an adult child?

Yes, by naming them on your nomination form. An adult child over 23 who is not dependent on you is a nominee rather than a dependant, and a nominee can generally only be paid if you actually nominated them. An unnamed adult child has no automatic claim on a pension held under trust and can be left out entirely, so writing them onto the form is what secures their place.

What happens when a child turns 23 partway through a course?

Under the pension tax rules dependant status ends at that birthday, although a beneficiary who already holds a drawdown fund can normally continue with it. Occupational schemes set their own rules and some keep a children's pension running while the child stays in full-time education, so ask the administrator for the exact date the income stops rather than assuming it lasts to the end of the course.