Category: Group life · Reviewed by Tim Roche, Director · PI & Commercial · Last reviewed 2026-06-10
A group life pension scheme is a registered pension scheme established under Chapter 2 of Part 4 of the Finance Act 2004 solely for the purpose of providing death benefits to the dependants and nominees of members. It is a sub-set of “group life insurance” — specifically, the registered variant — and it enjoys favourable corporation tax treatment of the employer’s premium and inheritance tax treatment of the benefit, but benefits count against the deceased’s lump sum and death benefit allowance.
Category: Group life Also known as: Death-only registered pension scheme Statutory basis: Finance Act 2004, Part 4 Related concepts: Registered group life policy, Group life insurance lump sum, Tax treatment group life
A group life pension scheme has a trust deed and rules, registered with HMRC under section 153 of the Finance Act 2004, and a death-only benefit structure. It is sometimes referred to as a “Section 9(2B) rights” scheme historically, although the post-2006 simplified regime applies a single set of registered scheme rules.
Registration is governed by Part 4 of the Finance Act 2004. Lump sums paid on death are tested against the lump sum and death benefit allowance (£1,073,100 from 6 April 2024 under the Finance Act 2024). The trust is normally a discretionary trust; the trustees pay benefit out within two years of notification of the death so that the benefit retains its tax-exempt status under PTM088100.
Group life pension schemes are common where the headline benefit is unlikely to exceed the lump sum allowance — for example a 3× salary scheme for a workforce with no salary above £200,000. For higher-paid populations the excepted group life route is normally preferred.
A scheme provides 4× salary lump sum benefit for all employees. The scheme is registered as a death-only pension scheme. An employee earning £60,000 dies in service; the £240,000 benefit is paid through the registered scheme to the deceased’s spouse free of income tax.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-10. Next review: 2026-12-10.
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