Many pensioners in the UK are benefiting from an inheritance of state pension payments due to the passing of their spouse or civil partner. Thanks to the inherited State Earnings-Related Pension Scheme (Serps), some individuals are receiving annual boosts of more than £5,000 to their pension.
This support can be especially important in providing additional financial security during retirement. However, many people may not fully understand the rules around inheriting part of their partner’s pension, which could lead to missed opportunities.
Here’s an overview of how inherited state pensions work, who can claim them, and how to ensure you receive the full benefits.
What is the Inherited State Pension Scheme (Serps)?
The State Earnings-Related Pension Scheme (Serps) was a part of the UK’s old state pension system, designed to provide an additional pension to those who paid into it through their National Insurance contributions.
If a spouse or civil partner dies, the surviving partner may be eligible to inherit part of the deceased person’s additional state pension. This payment can significantly increase the survivor’s pension income, with some individuals receiving boosts of over £5,000 annually.
In the 2023/24 tax year, approximately 2 million pensioners were receiving an inherited Serps payment, with over 541,000 of them receiving more than £5,000 per year.
For those lucky enough to inherit a substantial amount, the boost could be as much as £20,000 annually. In fact, the maximum potential inheritance in 2024/25 is approximately £11,356 per year, or £218.39 a week.
Who is Eligible to Inherit a State Pension?
To inherit part of a state pension, the surviving partner must meet specific criteria. The deceased spouse or civil partner must have been receiving a state pension, and the surviving partner must be of state pension age (currently 66).
The inheritance rules apply to both spouses and civil partners. It’s essential to note that those who remarry or enter into a new civil partnership before reaching state pension age are not eligible for inheritance benefits from their previous partner’s state pension.
The inherited amount depends on several factors, including the deceased partner’s National Insurance contributions and whether they had paid into the Serps system. If the deceased reached state pension age before April 6, 2016, the surviving spouse or civil partner may be eligible to inherit some or all of the additional state pension they received.
How Much Can You Inherit?
The amount of state pension you can inherit depends on several factors, such as when your partner reached state pension age, their National Insurance contributions, and whether they had topped up their state pension.
The maximum inheritance amount for the 2024/25 tax year is approximately £11,356.28 per year, or £218.39 per week. However, in the 2023/24 tax year, the weekly maximum was slightly lower, at £204.68.
If your spouse or civil partner reached state pension age before 2016, they may have had additional earnings that could be passed on.
However, those who reached state pension age after April 6, 2016, are subject to a new pension system, and understanding how inherited Serps affects your pension is important to ensure you receive the right amount.
How to Inherit a State Pension
If you believe you are eligible to inherit part of your partner’s state pension, it’s crucial to contact the Pension Service for more details on how to make a claim. For those whose partner reached state pension age before April 6, 2016, it’s essential to check their National Insurance record to see what you may be able to inherit.
If you have not reached state pension age yet, you can check if any of your partner’s contributions can be passed on to you by using the tools provided by the Government website.
If your partner passed away after reaching state pension age, and they hadn’t claimed their state pension, you may be able to claim up to three months of the basic state pension from their estate.
What Happens After a Person Dies?
When someone passes away, their state pension payments don’t automatically stop. The family must inform the Pension Service to halt the payments.
The surviving partner may be eligible for additional benefits, including bereavement benefits, depending on the deceased’s National Insurance contributions. To report a death and stop the payments, contact the Pension Service helpline at 0800 731 0469.
Other Important Considerations
In cases where a spouse or civil partner topped up their state pension, the surviving partner may also inherit some or all of the additional state pension they paid into.
This can be particularly beneficial for boosting the survivor’s pension income. However, if the surviving partner remarries or enters into a new civil partnership before reaching state pension age, they will not be eligible for any inheritance from the previous partner’s pension.
Inheriting a portion of your spouse or civil partner’s state pension can significantly improve your financial situation in retirement. However, understanding the rules around inherited pensions, such as Serps, is crucial to ensure you don’t miss out on these valuable benefits.
If you’re unsure of your eligibility or how much you can inherit, it’s important to reach out to the Pension Service for further guidance. Knowing the rules and taking action early can help boost your retirement income and provide greater security for your future.
FAQs
What is inherited state pension?
Inherited state pension is the additional state pension, known as Serps, that a surviving spouse or civil partner may inherit upon the death of their partner. This can boost their pension income, with some inheriting over £5,000 annually.
How much can I inherit from my partner’s state pension?
Surviving spouses or civil partners may inherit up to an annual maximum of £11,356.28 in 2024/25, depending on their deceased partner’s National Insurance contributions. The amount you inherit depends on when your partner reached state pension age and how much they contributed.
How do I know if I am eligible for inherited state pension?
You are eligible if your spouse or civil partner passed away and they reached state pension age before or after April 6, 2016, depending on their contributions to the additional state pension system (Serps). You can contact the Pension Service for more information.
What happens to state pension payments after my spouse dies?
When a spouse or civil partner dies, the surviving partner can inherit some or all of the deceased’s state pension. However, state pension payments do not automatically stop. The surviving partner must notify the Pension Service to cease the payments and inquire about inherited benefits.
Can I inherit a state pension if I remarry?
If you remarry or enter a new civil partnership before reaching state pension age, you will not be eligible to inherit any part of your deceased partner’s state pension.
