Pension rights of unmarried cohabitants on members’ death
Pension rights of unmarried cohabitants on members’ death

The following Pensions practice note provides comprehensive and up to date legal information covering:

  • Pension rights of unmarried cohabitants on members’ death
  • Pensions tax treatment of cohabitants
  • Scheme rules in practice
  • No unlawful discrimination under Equality Act 2010
  • Incompatibility of public sector nomination requirement with the ECHR
  • The Brewster case
  • Nicola Elmes v Essex County Council
  • Limits to the scope of the Brewster and Elmes cases
  • Implications of Brewster and Elmes for public sector pension schemes
  • The LGPS
  • More...

In this Practice Note, the term ‘cohabitant’ is used to refer to an unmarried partner (other than a civil partner) of a member.

This Practice Note also refers to the European Convention of Human Rights (ECHR). The UK ratified the ECHR in 1951 and it is incorporated into domestic law by the Human Rights Act 1998 (see Practice Note: An introduction to the Human Rights Act 1998). Brexit does not affect the UK’s position in relation to the ECHR. In fact, in the EU-UK Trade and Cooperation Agreement announced on 24 December 2020, the UK made a commitment to continue to respect the ECHR.

For information on the pension rights of same-sex spouses and civil partners of a member’s death, see Practice Note: Pension rights of spouses and civil partners on member’s death.

Pensions tax treatment of cohabitants

Pensions tax legislation under the Finance Act 2004 (FA 2004) allows registered pension schemes to provide a scheme pension to a cohabitant, but only if the cohabitant is a ‘dependant’ of the member. For this, it must be established that, at the date of the member’s death:

  1. the cohabitant was financially dependent on the member

  2. the cohabitant’s financial relationship with the member was one of mutual dependence, or

  3. the cohabitant was dependent on the member because of physical or mental impairment

Note however that there is no such restriction as regards the recipients of a lump sum death benefit

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