Pensioners can boost State Pension by over £5,000 | European Markets

Pensioners throughout the UK are being urged to make an important test which may increase their State Pension funds by more than £5,000 per 12 months.

New figures obtained by pension supplier Royal London have revealed that more than half a million pensioners are rising their pension pot by over £5,000 yearly by way of an inheritance loophole. The firm says that surviving spouses and civil companions can doubtlessly inherit not less than 50% of sure State Pension advantages up to a present most of £11,356. This quantities to £218.39 per week and is on high of any State Pension they’re already entitled to.

The inheritance funds come from the State Earnings Associated Pension Scheme (SERPS) which was half of the State Pension system earlier than 2016. The scheme – no longer in operation – allowed staff to construct up an entitlement to further State Pension Earnings.

If somebody paid into SERPS then half of their pension can then be inherited by their surviving partner or civil accomplice, however many people could not realise they’re entitled to assert it.

In keeping with Royal London, some pensioners are getting an enhanced State Pension of up to £22,858 per 12 months by way of this inheritance rule.

Figures from the firm discovered that within the tax 12 months 2023/24, more than 500,000 pensioners have been getting over £5,000 per 12 months in inherited SERPS funds, whereas more than 17,000 obtained in extra of £10,000.

In case your partner or civil accomplice dies then chances are you’ll be entitled to inherit half of their SERPS pension, however the quantity you’ll be able to inherit depends on once they died and their age on the time of their death.

In keeping with the 2024 figures obtained by Royal London, the average inherited SERPS fee for 2023/24 stood at £3,377 yearly.

Royal London’s client finance specialist Sarah Pennells mentioned: “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 October 6, 1945, and the woman was born before July 6, 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.”