U.K., Oct. 28 -- UK Parliament issued the following news:
The Public Accounts Committee (PAC) Chair, Sir Geoffrey Clifton-Brown MP, today responds to changes made in the Budget to the tax treatment of pension death benefits under the two-year rule, following correspondence with the government.
Today, Torsten Bell MP, the Minister for Pensions, has written to the PAC confirming a Budget change removing the two-year deadline for pension and lump sum death
benefits to be paid tax-free where the member died before age 75.
On 14 th October 2026, Public Accounts Committee (PAC) Chair Sir Geoffrey Clifton-Brown MP wrote to the government on tax and death benefit payments in the civil service pension scheme.
The letter expressed disbelief that the government intended to tax pension benefit payments for families of deceased civil servants, if a lump sum is not paid within two years – in the context of chaos currently engulfing the Civil Service Pension Scheme (CSPS), meaning that the likelihood of death benefit payments being made within two years is slim.
On 19 th October , Sally Jamieson MP, the Minister responsible for the CSPS, responded, setting out the government’s position, and making clear that neither the Cabinet Office nor the scheme administrator has statutory discretion under tax law to alter or waive these tax charges.
Chair quote
Public Accounts Committee Chair Sir Geoffrey Clifton-Brown MP said:
“This is a welcome announcement from government that I hope will go some way to reassuring civil service members caught up in an avoidable crisis that should never have escalated to this degree. This announcement is not to absolve Capita from processing and making payments to members of this scheme in a timely manner. Our Committee will continue to scrutinise this ongoing crisis and its impact closely.”
Further information
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