Widow's caution: Could you be losing out on an inherited state pension of up to £11,000?

You might be eligible to inherit a portion of the old state pension if your deceased spouse accrued contributions

Are you eligible and what are the rules?

Widows and widowers may be eligible to receive inherited state pension benefits, which would increase their state pension by thousands of pounds annually. If your late spouse came of age (or would have come of age) before April 6, 2016, you may be subject to the regulations.

According to recent data obtained by Royal London through a Freedom of Information (FOI) request, more than half a million surviving spouses increased their state pension by more than 5,000 under these rules during the previous tax year.

For the 2024 - 2025 tax year, the current maximum inheritance amount is 11,365 annually, or 218.39 per week. When their personal entitlement is also considered, Royal London claims that some widows and widowers are receiving an enhanced state pension of up to 22,858 annually overall.

Increasing your state pension is more crucial now than ever because inflation is rising once more. Retirement expenses have already skyrocketed in recent years, making it especially difficult for single seniors to divide the cost of housing, bills, and meals with a spouse.

According to the Pension and Lifetime Savings Association's (PLSA) most recent statistics, a single pensioner now requires at least £14,400 annually for a basic retirement. A moderate retirement would increase this to 31,300, and a comfortable retirement would increase it to 43,100. You will need more than this if you are still renting or making mortgage payments in retirement because it does not account for housing expenses.

The laws governing inheriting your partner's state pension benefits are intricate and frequently misinterpreted. In order to prevent missing out, it is crucial that surviving spouses verify their entitlement.

What was the old state pension system like?

The structure of the old state pension must be understood before diving into the regulations governing inherited state pension benefits. If you are a man born before April 6, 1951, or a woman born before April 6, 1953, you are subject to the previous system.

The previous state pension was made up of several parts. The basic state pension is the primary component; if you have a complete National Insurance record, it amounts to 169.50 per week.

Additionally, some individuals are eligible for an additional benefit called the additional state pension. The extra state pension has no set amount. This determines how much you get.

The additional state pension is paid into your bank account alongside your basic state pension, taking into account the duration of your National Insurance contributions, your earnings, whether you contracted out of the scheme, and whether you topped up your basic state pension (which was only possible between October 12, 2015, and April 5, 2017).

If your spouse has a basic state pension, can you inherit it?

In the event that your spouse passes away first and you are both covered by the previous system, you may be eligible for a higher monthly basic state pension. However, this will rely on your spouse's National Insurance history. And only if you haven't already established a complete National Insurance record yourself will you be eligible for the additional funds.

There are, however, some crucial disclaimers to be aware of. This right will be taken away from you if you are younger than the state pension age at the time of your spouse's death and you remarry before you become that age.

Is it possible to inherit their extra state pension?

A portion of your spouse's additional state pension, up to the current maximum of 11,356 (20242025 tax year), may also be yours if you outlive them. This is on top of any state pension to which you may be entitled on your own.

Three programs make up the additional state pension.

Source: DWP data that Royal London obtained in 2024 through a freedom-of-information request.

According to Sarah Pennells, consumer finance specialist at Royal London, "this data shows how much of a difference inheriting a SERPS pension from your husband, wife, or civil partner can make."

While over two million people are reporting inherited SERPS, there is concern that others might be left out. The secret to increasing your retirement income is knowing the rules," she continued.

Sir Steve Webb, the former minister of pensions, has in fact previously brought attention to instances in which pensioners may have lost out because DWP employees provided them with inaccurate information over the phone. The idea that you cannot inherit the benefit if your spouse passed away before you reached state pension age is one example of a misconception. This isn't true.

Additionally, some individuals think that since they are currently receiving the new state pension, they are not eligible to inherit their partner's additional state pension, which was a component of the previous plan. Once more, this is untrue.

It follows the DWP's earlier admission of mistakes that resulted in underpayments of state pensions to widows and other groups. Since 2021, three groupsmarried people, widowed people, and those over 80have been participating in a correction exercise within the DWP. Over 850,000 cases have been reviewed so far, including over 445,000 for widows.

"Our top priority is making sure that state pension underpayment rates stay as low as possible and that pensioners receive the security and dignity they deserve in retirement," the DWP stated. "As of right now, we have finished the great majority of the exercise's cases as scheduled, with only a few cases left because the customer needed more documentation.

If you have any questions about your eligibility, you should get in touch with the pension service.