State pension ‘not enough’ to retire on says financial advisor
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People may be able to inherit an extra payment on top of their new state pension if they are widowed. However, they will not be able to inherit anything if they remarry or form a new civil partnership before reaching state pension age.
What is additional state pension?
If one’s spouse or civil partner dies, one may be able to inherit part of their additional state pension. People wanting to find out more about this can contact the Pension Service to check what they can claim and how.
The additional state pension, also known as the state second pension or SERPS, is an extra amount of money people can get on top of their basic state pension if they are a man born before April 6, 1951 or a woman born before April 6, 1953.
People who were born after these dates get the new state pension. They will therefore not qualify for the additional state pension, but may still be able to inherit additional state pension from their partner.
Can you inherit additional state pension?
One may inherit part of their deceased partner’s additional state pension if their marriage or civil partnership began before April 6, 2016 and either their partner reached state pension age before April 6, 2016 or died before that date but would have reached state pension age on or after it. This will be paid to the person inheriting it along with their normal state pension.
However, people cannot inherit their spouse or civil partner’s additional state pension if they remarry or form another civil partnership before reaching state pension age.
The date someone reached state pension age also affects whether they can inherit additional state pension. People who reached state pension age before April 6, 2010 cannot inherit their spouse or civil partner’s additional state pension if they died before they reached their state pension age and after the person looking to inherit reached theirs.
It is not possible to inherit one’s spouse or civil partner’s additional state pension if either their spouse or civil partner died on or after April 6, 2016 and reached (or would have reached) state pension age on or after that date, or one started their marriage or civil partnership on or after April 6, 2016.
How much additional state pension can be inherited?
It can be possible to inherit up to 50 percent of one’s spouse or civil partner’s additional state pension, with the maximum that can be inherited depending on when the spouse or civil partner died.
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If they died before October 6, 2002, up to 100 percent of their additional state pension can be inherited. If they died on or after October 6, 2002, the maximum additional state pension that can be inherited depends on their date of birth.
If one’s spouse or civil partner died within 90 days of topping up their state pension, the top up should have been refunded to their estate (their total property, money and possessions), minus any payments they received before they died.
This means their surviving partner will not inherit the top up as part of their additional state pension.
People who already receive additional state pension themselves and are looking to inherit their partner’s additional state pension as well should be aware the maximum amount of that can be received by one person is £180.31 per week.
Widowed Parent’s Allowance
Those who receive Widowed Parent’s Allowance may inherit additional state pension before they reach state pension age. They stop receiving it if their Widowed Parent’s Allowance ends, and may receive it again when they reach state pension age if they were over 45 when they were entitled to Widowed Parent’s Allowance.
However, if one’s Widowed Parent’s Allowance or Bereavement Allowance ended before they were 55, they will receive less additional state pension.
Some people receive a ‘protected payment’ as part of their state pension, and this could also be inherited.
The old state pension was made up of a basic pension plus an additional pension linked to earnings. One’s protected payment is the part of their starting amount which is above the full new state pension, and is therefore paid on top of the full new state pension.
Half of one’s partner’s protected payment can be inherited if their marriage or civil partnership began before April 6, 2016 and their state pension age is on or after that date and they died on or after that date. This will be paid to the person inheriting it with their normal state pension.
Deferred state pension
People may also inherit part of or all of their partner’s extra state pension or lump sum if they died while they were deferring their state pension, meaning they had not started claiming it yet, or if they had started claiming it after deferring.
For this to be possible, they must have reached state pension age before April 6, 2016, and the person looking to inherit the deferred state pension must have been married or in a civil partnership with the deceased party when they died.
Reduced rate National Insurance
The new state pension is based on one’s own National Insurance record, but if someone paid married women’s or widows’ reduced rate National Insurance, they might be able to increase their new state pension.
Pension sharing orders
If one gets divorced or dissolves their civil partnership, the courts can make a ‘pension sharing order’, meaning one will get an extra payment on top of their state pension if their ex-partner is ordered to share their additional state pension or protected payment with them.
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