If you died before taking your bp TargetPlan benefits, the money wouldn’t automatically go to your spouse, partner or family. Aegon, the scheme provider, decides who receives it. Unless you’ve completed a nomination of beneficiary form, they’re making that decision with no guidance from you.
The number of bp employees who have never completed a nomination with Aegon, or completed one years ago and never updated it, is higher than you might expect. For many people, their DC pot is substantial. Fixing it takes about five minutes.
This article covers the DC TargetPlan. For the DB scheme, see What Happens to Your bp Final Salary Pension When You Die?
Who receives your TargetPlan pension if you die?
Most bp employees are familiar with the TargetPlan as their workplace DC pension. Contributions go in, investments grow, you can use this money to spend in retirement. Simple enough.
But here’s a question fewer people stop to ask: if you died before taking your benefits, do you know who would actually receive the money?
When a TargetPlan member dies before taking benefits, the lump sum doesn’t automatically pass to a spouse, partner, or family member. Instead, Aegon has discretion over who receives it.
Why does Aegon have discretion?
This isn’t unusual. Most modern pension schemes work this way, and there’s a good reason for it: keeping the death benefit outside your estate means it normally falls outside the scope of Inheritance Tax. That’s a significant advantage, and one worth acting on. Labour’s proposed changes will bring pension death benefits into the scope of Inheritance Tax from April 2027, the start of next tax year.
But discretion cuts both ways. Without any guidance from you, Aegon is making that decision in the dark.
How the nomination of beneficiary form works
Aegon provides a form specifically for TargetPlan members, which allows you to tell them exactly who you’d like to receive the lump sum, and in what proportions.
Importantly, this isn’t a binding nomination. Aegon retains ultimate discretion. But in practice, they’ll generally follow your instructions, provided they’re up to date and clearly expressed. Think of it as giving them a strong steer rather than a legal instruction.
You can nominate up to four beneficiaries on the standard form, with the option to add further names on a separate sheet. You can split the benefit between them however you choose, provided the percentages add up to 100%.
One thing to be aware of: once you’ve signed and submitted the form, any changes also require Aegon’s agreement. It isn’t something you can unilaterally update at any time in the way you might update a password or a bank account. That makes getting it right, and keeping it current through a formal process, all the more important.
You also can’t instruct Aegon to pay the benefit to your estate directly. It must go to named individuals, or in some circumstances to the trustees of a trust. If you want to use a trust arrangement, contact Aegon before completing anything, as they’ll need to review the documentation first.
How to submit the form to Aegon
You don’t need to post anything. Once completed, the form can be sent securely through the online TargetPlan portal. Log in at aegon.co.uk/targetplan, go to your Profile menu, select the Secure Inbox tab, and attach the completed form to a new message.
Alternatively, you can call Aegon on 0345 646 0423 and request a copy of the form to be sent to you.
When did you last update your nomination?
If you completed a nomination form years ago and have since married, divorced, had children, or seen any other significant change in your family circumstances, it’s worth reviewing. Aegon will do their best to follow instructions that are in place, but outdated nominations can create real problems at an already difficult time.
Reviewing your nomination takes about five minutes and could make an enormous difference to the people you leave behind.
Two things worth doing today
Check whether you have a nomination in place with Aegon for your TargetPlan. If you aren’t sure, log in at aegon.co.uk/targetplan and look under your profile.
And if you completed one some time ago, ask yourself whether it still reflects your wishes. If the answer is no, or you aren’t sure, get in touch and we can help you work through it.
Who can you think of that’s approaching retirement and hasn’t thought about what happens to their pension if they pass away before taking their benefits? Share this article with them. It’s a short read with a very practical outcome.
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This is for educational purposes only. It’s not personal financial advice and we’re not recommending any specific course of action. Everyone’s situation is different, and the right approach to pension nominations depends on individual circumstances. You should seek professional financial advice before making any decisions.
While we have extensive experience helping bp employees and alumni optimise their benefits, Emery Little operates independently and is not affiliated with or endorsed by the bp group, including BP Pension Trustees Limited, on behalf of the BP Pension Fund. This allows us to provide objective, independent guidance focused solely on your best interests.
