State Pension inheritance rule boosts over half a million payments by £5,000
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More than half a million people are boosting their State Pension by over £5,000 annually through inheritance, according to figures obtained by a pension provider.
A freedom of information (FOI) request by pensions mutual Royal London indicated that in the tax year 2023/24 more than two million pensioners (around 2,027,440) received a payment from an inherited state earnings-related pension scheme (Serps).
This was part of the old State Pension system, which enabled people to build up an entitlement to extra State Pension income. According to the figures, around 541,760 pensioners were receiving more than £5,000 a year in inherited Serps payments, including 17,460 who received more than £10,000.
If someone's spouse or civil partner dies, they may be able to inherit part of their additional State Pension, which will be paid on top of the surviving spouse's State Pension when they reach the official age of retirement, which is currently 66.
Surviving spouses and civil partners can potentially inherit up to an annual maximum of around £11,356.28 (£218.39 per week) for the 2024/25 tax year. For the 2023/24 tax year, the weekly maximum amount of inherited Serps was slightly lower, at £204.68.
The data was released by the Department for Work and Pensions (DWP) and taken from its quarterly statistical inquiry. According to the figures obtained by Royal London, the average annual inherited Serps payment for 2023/24 was £3,377.
As a result of the inherited pension boost, some people could be receiving as much as £20,000-plus per year in an enhanced State Pension. A new, simplified, 'New State Pension' system was introduced in April 2016.
Royal London's consumer finance specialist Sarah Pennells said: '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.'
She continued: '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.'
Royal London advises anyone unsure about their inherited Serps entitlements to contact the Pension Service to find out what they should be receiving - full details can be found on GOV.UK here.
State Pension payments 2025/26
The New and basic State Pension weekly payment rates increased on April 7.
Full New State Pension
Weekly payment: £230.25 (from £221.20)
Four-weekly payment: £921 (from £884.80)
Annual amount: £11,973 (from £11,502)
Full Basic State Pension
Weekly payment: £176.45 (from £169.50)
Four-weekly payment: £705.80 (from £678)
Annual amount: £9,175 (from £8,814)
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