Death in service is a benefit many UK employers provide that pays a tax-free lump sum to your loved ones if you die while you are employed. It is a valuable perk, but it works differently from a personal life insurance policy and is not always enough on its own. Here is how it works.
What is death in service benefit?
Death in service is a form of life cover arranged by your employer, usually as part of a workplace pension or group life scheme. If you die while still employed by that organisation, a lump sum is paid to your beneficiaries. You do not pay a separate premium — it is provided as an employee benefit.
How much does death in service pay out?
The payout is typically a multiple of your annual salary, most often two to four times your yearly pay, though some employers offer more. For example, a 3x benefit on a £35,000 salary would pay £105,000. Check your contract or scheme handbook for the exact multiple.
Is death in service taxed?
Benefits paid from a registered scheme through a discretionary trust are normally free of income tax and inheritance tax, and the money passes to your beneficiaries without waiting for probate. Importantly, death in service benefits paid from a registered pension scheme are also excluded from the changes that bring most unused pensions into inheritance tax from 6 April 2027.
Who decides who receives the money?
Because the benefit is held in a discretionary trust, the scheme trustees make the final decision on who receives it. They are guided by your expression of wish (or nomination) form — so it is important to complete this form and keep it up to date, especially after a marriage, divorce, or new child.
Is death in service enough on its own?
Not usually. The cover ends the day you leave that employer, and a few times your salary may not be enough to clear a mortgage and support your family for years. Many people use death in service alongside a personal life insurance policy that stays with them whatever job they are in.
Frequently asked questions
Do I keep death in service if I change jobs?
No. The cover is tied to your employer and ends when you leave. Your new employer may or may not offer a similar benefit.
Does death in service only pay out if I die at work?
No. It pays out if you die from any cause while employed, not only deaths that happen at the workplace.
Do my family need to claim it?
Your family should tell your employer or the scheme administrator about the death. The trustees then arrange payment, usually after seeing the death certificate.
How Solace Care can help
After a death, knowing which benefits and policies exist — and who to contact — can be overwhelming. Solace Care helps you keep track of every policy, benefit and deadline in one place. Want help with the practical side after a death? Create a Solace Care account or read more guides.
