Revealed: more than 17,000 people boosted their State Pension by £10,000+ last year through inheritance rule

• Royal London has obtained Freedom of Information (FOI) data revealing how surviving spouses are boosting their State Pension entitlements through inheritance
• Some widows and widowers are doubling their money to more than £22,000 annually
• Royal London is urging pensioners to check their entitlements in case they are missing out

More than half a million people are boosting their State Pension by over £5,000 annually through inheritance, according to figures obtained by Royal London.

Surviving spouses and civil partners can potentially inherit at least 50% of certain State Pension benefits up to a current maximum of £11,356 (£218.39 per week) for the 2024/25 tax year. This is in addition to any State Pension they are entitled to in their own right. As a result of the inheritance, some pensioners are currently receiving an enhanced State Pension of up to £22,858 a year.

A freedom of information (FOI) request by Royal London has revealed that in the tax year 2023/24 over two million pensioners (2,027,440) received a payment from an inherited State Earnings Related Pension Scheme (SERPS). This was part of the State Pension system before 2016, which enabled employees to build up an entitlement to extra State Pension income. According to the figures, 541,760 pensioners were receiving more than £5,000 a year in inherited SERPS payments, including 17,460 who received in excess of £10,000.

The data released by the Department for Work and Pensions (DWP) relates to the old State Pension which was available to anyone who reached State Pension age before April 6, 2016. The old State Pension contained two components: the main, basic amount you could receive by paying or being credited with enough National Insurance and then an earnings-related ‘additional’ pension, originally SERPS and later replaced by the State Second Pension. Both these schemes allowed employees to build up an entitlement to extra State Pension income. They were abolished under the new State Pension system, introduced in April 2016.

The amount someone can inherit is calculated according to the date a husband, wife or civil partner died and their age at the time of death. According to the 2024 figures obtained by Royal London, the average inherited SERPS payment for 2023/24 stood at £3,377 annually.

Royal London’s Consumer Finance Specialist Sarah Pennells commented:

"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 6 October 1945 and the woman born before 6 July 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."