More than two million pensioners in the UK are benefiting from inherited State Earnings-Related Pension Scheme (Serps) payments, with over half a million receiving an annual boost of more than £5,000. This revelation, uncovered through a Freedom of Information (FOI) request by Royal London, highlights the significant impact that inherited pension entitlements can have on retirement income.
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Understanding the Inherited Serps Pension Boost
The State Earnings-Related Pension Scheme (Serps) was part of the old UK state pension system, allowing workers to accrue additional pension entitlements based on their earnings history. Although the system was replaced in 2016 with the introduction of the new State Pension, those who built up entitlements before the change can still benefit from the scheme. Importantly, surviving spouses and civil partners may be eligible to inherit a portion of these additional pension payments.
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Who Can Inherit a Serps Pension?
If a person’s spouse or civil partner passes away, they may be entitled to inherit a portion of their additional state pension. The amount inherited depends on several factors, including:
- The date of birth of both individuals
- The deceased partner’s contributions to Serps
- Whether the deceased had already started receiving their pension before April 6, 2016
For the 2024/25 tax year, the maximum amount that can be inherited stands at approximately £11,356.28 annually (£218.39 per week).
How Many People Are Benefiting?
According to the latest data released by the Department for Work and Pensions (DWP), in the 2023/24 tax year:
- Over 2 million pensioners received payments from inherited Serps.
- Approximately 541,760 pensioners received more than £5,000 annually.
- 17,460 pensioners benefited from more than £10,000 in inherited Serps payments.
- The average annual inherited Serps payment was found to be £3,377.
This means that some retirees are receiving a total state pension exceeding £20,000 annually thanks to Serps inheritance rules.
Why Many Pensioners May Be Missing Out
Despite the high number of recipients, financial experts warn that many eligible individuals may not be aware of their entitlement to inherited Serps payments.
Sarah Pennells, a consumer finance specialist at Royal London, stated:
“This data shows how much of a difference inheriting a Serps pension from your husband, wife, or civil partner can make. However, the concern 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.”
How to Check If You’re Eligible for an Inherited Pension Boost
If you believe you may be entitled to an inherited Serps pension but are unsure, follow these steps:
- Contact the Pension Service – Call the government’s Pension Service helpline or visit their website to check your entitlements.
- Review Your Pension Records – Check previous statements to see if Serps contributions were made before April 6, 2016.
- Seek Professional Advice – If unsure, consider consulting a pension advisor to ensure you receive the correct payments.
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Final Thoughts: Maximizing Your Retirement Income
While the UK has moved towards a more simplified state pension system, the legacy of Serps continues to provide substantial financial support to millions of pensioners. If you are a surviving spouse or civil partner, checking your entitlement could mean thousands of extra pounds each year.
Ensuring you understand the rules and take the necessary steps to claim what you are owed can make a significant difference in your retirement income. Don’t miss out on money that could help secure your financial future—check your eligibility today.
