Millions of retired Britons have increased their annual state pension income by utilising inheritance rules, according to the latest government figures. During the 2023/24 tax year, over 2 million pensioners benefited from the inherited State Earnings-Related Pension Scheme (Serps), which was part of the former state pension system before it was reformed in 2016.
This financial boost has been particularly significant for surviving spouses and civil partners, with some receiving over £10,000 per year. Despite this, experts warn that many eligible individuals may be missing out on their entitlement.
How the Inherited Serps Scheme Works
The Serps scheme allows surviving spouses or civil partners to inherit a portion of their late partner’s additional state pension. This inheritance is then added to their own state pension payments when they reach the eligible pension age.
Key statistics from the 2023/24 tax year:
- 2,027,440 retirees benefited from inherited Serps payments.
- 541,760 pensioners received over £5,000 annually.
- 17,460 individuals inherited more than £10,000 per year.
As a result, many pensioners are seeing their annual pension income exceed £20,000, when combined with their standard state pension and other retirement earnings.
Increase in Inherited Serps for 2024/25
With the new tax year (2024/25), the maximum annual inherited Serps payment is set to rise to £11,356.28 (£218.39 per week), up from last year’s £204.68 per week.
Average inherited Serps payment in 2023/24: £3,377
New maximum payment in 2024/25: £11,356.28 per year
This increase could further support retirees who rely on inherited pension benefits for their financial stability in retirement.
Are You Missing Out on Inherited Serps?
Despite over 2 million pensioners receiving Serps benefits, many eligible individuals may not be claiming their rightful payments.
Sarah Pennells, consumer finance specialist at Royal London, stated:
“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.”
What You Can Do:
Check Your Eligibility – If your late spouse or civil partner contributed to Serps, you may be entitled to inherited payments.
Contact the Pension Service – If you are unsure about your entitlements, reach out to the Pension Service for a detailed assessment.
Seek Financial Advice – If you think you may be missing payments, consult a financial advisor or pension expert.
Pension Service Helpline: 0800 731 7898 (Monday to Friday, 8 AM – 6 PM)
Why Does Serps Still Matter?
The UK state pension system was reformed in 2016, introducing the new state pension that focuses on individual entitlements rather than inherited benefits. However, the legacy of Serps remains a crucial source of income for many retirees.
Why Serps is still relevant:
- It provides a financial cushion for widows, widowers, and civil partners.
- Many pensioners rely on these payments to maintain their standard of living.
- Some retirees receive significant sums, boosting their annual income.
Given its impact, pensioners must ensure they claim all entitled benefits to maximize their retirement income.
The Serps inheritance scheme continues to provide financial security for over 2 million retirees, with payments set to increase in 2024/25. However, many eligible pensioners may not be claiming their full entitlement.
If you believe you might be entitled to inherited Serps payments, it’s essential to check your eligibility and contact the Pension Service to ensure you receive what you’re owed. A simple inquiry could result in a significant boost to your retirement income.
FAQ’s
What is the inherited Serps pension?
The inherited Serps pension allows surviving spouses or civil partners to receive part of their late partner’s additional state pension, boosting their retirement income.
Who is eligible to inherit Serps payments?
You may be eligible if your late spouse or civil partner contributed to Serps before the state pension system was reformed in 2016.
How much can I receive from inherited Serps?
For the 2024/25 tax year, the maximum inherited Serps payment is £11,356.28 per year (£218.39 per week).
How can I check if I’m entitled to inherited Serps?
You should contact the Pension Service at 0800 731 7898 to verify your entitlement and ensure you’re receiving the correct payments.
Are there pensioners missing out on Serps payments?
Yes, experts believe many pensioners may not be claiming their full entitlement. It’s important to check with the Pension Service if you are unsure.