More than half a million people are boosting their state pension by more than £5,000 a year (Image: Getty)
Thousands of Brits are boosting their state pension by more than £10,000 a year through making one simple chec.
New figures show more than half a million are raking in £5,000 extra in inherited SERPS payments, including 17,460 who received in excess of £10,000.
The figures were obtained by Royal London as pensioners grapple with retirement savings and navigate pension tax. Additional income through this little known rule could help those eligible boost their retirement income.
Royal London found that some widows and widowers are doubling their money to more than £22,000 annually and is urging pensioners to check their entitlements in case they are missing out.
Surviving spouses and civil partners can potentially inherit at least 50% of certain benefits up to a current maximum of £11,356 (£218.39 per week) for the 2024/25 tax year.
This is in addition to any they are entitled to in their own right. As a result of the inheritance, some pensioners are currently receiving an enhanced of up to £22,858 a year.
A freedom of information (FOI) request by Royal London has revealed that in the tax year 2023/24 over two million pensioners (2,027,440) received a payment from an inherited State Earnings Related Pension Scheme (SERPS).
This was part of the system before 2016, which enabled employees to build up an entitlement to extra income.
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Data released by the Department for Work and Pensions () relates to the old which was available to anyone who reached age before April 6, 2016.
The old contained two components: the main, basic amount you could receive by paying or being credited with enough National Insurance and then an earnings-related ‘additional’ pension, originally SERPS and later replaced by the State Second Pension.
Both these schemes allowed employees to build up an entitlement to extra income. They were abolished under the new system, introduced in April 2016.
The amount someone can inherit is calculated according to the date a husband, wife or civil partner died and their age at the time of death. According to the 2024 figures obtained by Royal London, the average inherited SERPS payment for 2023/24 stood at £3,377 annually.
Sarah Pennells, consumer finance specialist at Royal Lond said the 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 , generally 50% can be inherited by your husband or wife, although the rules are slightly different for people who reach 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 from your husband, if they remarried or formed a civil partnership before they reached 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 to find out what you should be receiving.”
How many are inheriting SERPS
|
Annual Inherited SERPS Payment |
Number of Recipients |
|
£0-999 |
483,880 |
|
£1,000-£1,999 |
268,080 |
|
£2,000-£2,999 |
263,760 |
|
£3,000-£3,999 |
256,180 |
|
£4,000-£4,999 |
213,780 |
|
£5,000-£5,999 |
176,400 |
|
£6,000-£6,999 |
140,180 |
|
£7,000-£7,999 |
101,760 |
|
£8,000-£8,999 |
66,420 |
|
£9,000-£9,999 |
39,540 |
|
£10,000+ |
17,460 |
Source: FOI data 2024.