Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether the lump sum death benefit policy is being introduced due to issues with Civil Service pensions.

No. The changes announced at Autumn Budget 2026 to remove the ‘two-year rule’ for pension and lump sum death benefits are not driven by any specific scheme.

The government is removing the two-year deadline for pension and lump sum death benefits to be paid tax free to beneficiaries where an individual dies before age 75. This change will apply to any payment made on or after 28 October 2026 and will ensure that these benefits do not become subject to tax because of delays beyond a beneficiary’s control.

Trustees and scheme administrators will continue to have a duty to act prudently and will still need to identify beneficiaries and settle pension benefits promptly.