This is incorrect. Aside from some very limited circumstances (e.g. additional voluntary contribution pensions held previously by public sector workers, which pay into a person’s estate on death - that’s the primary exception), personal pensions are outside of a person’s estate for inheritance tax purposes. The other main exception is if an individual doesn’t nominate a beneficiary. In that case the trustees of the scheme may pay the proceeds into the estate.

An individual can nominate whomever they choose as the beneficiary/beneficiaries on their personal pensions. They remain outside the policyholder’s estate irrespective of whether the beneficiary is a spouse or direct descendant (of Frank at no. 27).

What you say about workplace and public sector pensions also isn’t quite correct. For a long time now the vast majority of ‘non-public sector’ pensions have been ‘pots of money’ (defined contribution schemes). These are personal pensions and are treated for inheritance tax purposes in the same way. They are outside an individual’s estate provided beneficiaries are nominated.

The ‘public sector’ pensions you mentioned (whilst not confined to the public sector) are defined benefit schemes (as you say, not a pot of money, a guaranteed income). But these are usually inherited by spouses. Usually to the tune of 50% of the annual pension on death. But the pension is paid as income so becomes part of the spouse’s estate… unless they then invest it in a personal pension.