More than 17,000 people boosted their State Pension by £10,000 or more last year through an inheritance rule, Royal London has said.
State pensioners can boost state pension by £10,000 – and 17,000 people have already
State pensioners can boost their state pension by £10,000 – and 17,000 people have already done it. More than 17,000 people boosted their State Pension by £10,000 or more last year through an inheritance rule, Royal London has said.
The firm obtained Freedom of Information (FOI) data revealing how surviving spouses are boosting their State Pension entitlements through inheritance. Some widows and widowers are doubling their money to more than £22,000 annually.
More than half a million people are boosting their State Pension by over £5,000 annually. Surviving spouses and civil partners can potentially inherit at least 50% of certain State Pension benefits up to a current maximum of £11,356.
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It means some pensioners are currently receiving an enhanced State Pension of up to £22,858 a year. Data shows over two million pensioners (2,027,440) received a payment from an inherited State Earnings Related Pension Scheme (SERPS).
The FOI shows over 541,760 pensioners were receiving more than £5,000 a year in inherited SERPS payments, including 17,460 who received in excess of £10,000.
Royal London’s Consumer Finance Specialist Sarah Pennells commented: “This data shows how much of a difference inheriting a SERPS pension from your husband, wife or civil partner can make. The worry is that, while more than two million people are claiming inherited SERPS, others could be missing out.
“Understanding the rules is key to boosting your retirement income. For the Additional State Pension, generally 50% can be inherited by your husband or wife, although the rules are slightly different for people who reach State Pension age after April 2016. However, a higher percentage can be passed on if the man was born before 6 October 1945 and the woman born before 6 July 1950.
“However, the rules also say that you can’t inherit any additional State Pension from your husband, if they remarried or formed a civil partnership before they reached State Pension age.
“As we continue to adapt to the new system introduced in 2016, which focuses on individual entitlements, understanding the legacy of SERPS and its relevance for thousands of retirees remains crucial.
“If you’re in doubt about your inherited SERPS entitlements, then you should contact the Pension Service to find out what you should be receiving.”