If you were widowed before your spouse reached state pension age, your own payouts could get a boost: Find out how to check here…
- More than a quarter of a million bereaved pensioners currently benefit from an state pension uplift
- This comes from NI contributions made by a spouse who died before official retirement age
- But the Government only tops up your income when it is aware you are a widow, widower, or surviving civil partner, says ex-Pensions Minister Steve Webb
Inherited state pension: Many people benefit from an uplift to payouts from late spouses who didn’t reach state pension age
People who were widowed before their late spouse reached state pension age should check they aren’t missing out on hundreds or even thousands of pounds in retirement, says ex-Pension Minister Steve Webb.
More than a quarter of a million bereaved pensioners currently benefit from a state pension uplift from National Insurance contributions made by a spouse who died before official retirement age.
But the Government only tops up your income when it is aware you are a widow, widower, or surviving civil partner, says Webb.
At state retirement age, people have to tell the Government their marital status, but some people might tick the box marked ‘single’ rather than ‘widowed’ without realising they could be forfeiting inherited state pension from their late partner.
‘I am often asked what happens to the National Insurance contributions of those who die before reaching state pension age,’ says Webb, who is now policy director at Royal London and This is Money’s pensions columnist.
‘In principle, as long as the surviving spouse does not remarry, he or she can potentially get a higher state pension in respect of their late spouse’s contributions.
‘Although this should be picked up by the Department of Work and Pensions, it seems that there is a chance the link might not be made.
‘I would encourage anyone in this position to check that they have received an uplift, and to contact the Pension Service if they are unsure.’
You need to be unmarried when you reach state pension age to benefit from your late spouse’s NI record, but your payouts will be unaffected if you then remarry later in life.
Webb explains: ‘It is your marital status at state pension age which is the key to your rights to a pension from a spouse’s contributions.
‘Marrying after state pension age cannot take away your entitlement to a pension you were entitled to draw at pension age by dint of an earlier marriage.’
Webb discovered via a Freedom of Information request to the DWP that some 263,000 widows and widowers over state pension age currently get a higher payout because of contributions made by a late spouse who never reached state pension age themselves.
The DWP reply says bereaved people can inherit state pension in this way ‘if we become aware’ they are a widow, widower or surviving civil partner when they start getting their payments.
Webb says this suggests there are people who should be getting a top-up but are not doing so because the DWP is unaware they were widowed, possibly decades ago.
The DWP confirmed it would backdate inherited state pension payouts to someone who had unwittingly missed out on them.
A DWP spokesperson said: ‘When anyone claims their state pension we automatically investigate if they are eligible to inherit any from a late partner.
‘We want everyone to claim what they are eligible for. Anyone who wants to discuss their entitlement should contact the pension service on 0800 731 7898.’
How much state pension can a widow or widower inherit?
The Government has a website where you can answer questions to find out what you might get here.
Webb says the site explains how pensioners whose late spouse never reached pension age can still benefit from their NI contributions, and receive an uplift that adds hundreds or even thousands of pounds to their own annual state pension.
1) If the pensioner reached pension age before 6 April 2016, they can get:
a) A boost to their basic state pension up to a full basic pension based on their late spouse’s record;
b) Inheritance of at least half of the SERPS pension that the late spouse built up – see here.
2) If the pensioner reached state pension age on or after 6 April 2016, and the spouse died before pension age before 6 April 2016, they can get:
‘…A portion of their Additional State Pension and half their Graduated Retirement Benefit’ – see here.
Steve explains the rules on couples inheriting state pension from each other when one dies after state pension age here.
Marriage and the state pension – Steve Webb answers reader questions
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