When it comes to State Pension entitlements, there are often questions around what happens when one spouse or civil partner dies. In particular, many people wonder if their surviving wife or husband will automatically receive half of their State Pension.
Quick Answers
– A surviving spouse or civil partner may be entitled to some of their deceased partner’s State Pension, but not necessarily half of it.
– The amount inherited depends on the deceased’s National Insurance contributions and when they reached State Pension age.
– For deaths before 6 April 2016, the spouse may inherit a Basic State Pension based on their partner’s contributions.
– For deaths after 6 April 2016, the spouse inherits part of their partner’s New State Pension.
– Certain criteria around marriage length and residency must be met to inherit any State Pension.
– Inherited State Pension isn’t taxable for the surviving spouse and doesn’t affect their own State Pension.
Understanding State Pension inheritance
When someone who receives a State Pension dies, their spouse or civil partner may be eligible to inherit part of it. But there are some common misconceptions around how this works.
Firstly, the surviving spouse doesn’t automatically receive half of the deceased’s State Pension. The exact amount depends on the type of State Pension the deceased had and their National Insurance contribution record.
Secondly, an inherited State Pension isn’t taxable income for the spouse. They can receive it on top of their own State Pension or other income without paying extra tax.
State Pension inheritance before 2016
For people who reached State Pension age before 6 April 2016, the rules around inheritance relate to the Basic State Pension.
If their spouse or civil partner hasn’t reached State Pension age themselves, they may inherit a Basic State Pension based on the deceased’s National Insurance contributions. This is paid at the rate of the Basic State Pension when they claim it.
To be eligible, the couple must have been married or in a civil partnership when the person died. The surviving spouse must also satisfy a residency test, showing significant periods of living in the UK.
The amount inherited depends on the deceased partner’s National Insurance contribution record:
- If they had the maximum contributions, the survivor inherits the full Basic State Pension.
- With incomplete contributions, the survivor inherits a partial Basic State Pension.
- If the deceased partner never contributed, no Basic State Pension can be inherited.
Any Basic State Pension inherited is paid in addition to the survivor’s own State Pension entitlements.
State Pension inheritance from 2016
The new State Pension system was introduced on 6 April 2016. Under these rules, a surviving spouse or civil partner may inherit part of their deceased partner’s State Pension.
To be eligible, the couple must have been married or in a civil partnership when the person died. The survivor must also meet the residency criteria.
Rather than being based on the deceased’s contributions, the inheritance amount is calculated as:
- 1/2 of the deceased’s New State Pension if they reached State Pension age before 6 April 2016
- 1/3 of the deceased’s New State Pension if they reached State Pension age on or after 6 April 2016
So at most, the inheriting spouse will receive half of the deceased’s New State Pension. If the deceased partner’s State Pension was less than the full rate, the inheritor will receive half or a third of this lower amount.
Any inherited State Pension isn’t taxable for the spouse and doesn’t affect their own State Pension entitlement.
When is State Pension inherited?
A surviving spouse or civil partner can inherit State Pension entitlements immediately if both the following apply:
- The deceased partner reached State Pension age before 6 April 2016
- The inheriting spouse has already reached State Pension age themselves
In this situation, they can start claiming the inherited State Pension straight away, paid at the current rate of the Basic State Pension.
If either spouse reached State Pension age on or after 6 April 2016, the surviving partner inherits the State Pension when they reach State Pension age. It’s paid at the current New State Pension rate.
So in this case there will be a gap between when the person dies and when their spouse claims the inherited pension.
Marriage and residency requirements
To inherit any of your spouse or civil partner’s State Pension on their death, your marriage or civil partnership must meet certain criteria:
- You were married or in a legally recognized civil partnership at the time they died
- The marriage or civil partnership had lasted for at least 12 months, unless there was a child of the relationship
In addition to marriage requirements, both you and your deceased partner must have satisfied a minimum residency period in the UK of:
- 10 years prior to death to inherit a Basic State Pension
- 3 years prior to death to inherit a New State Pension
Periods of living in certain EEA countries or countries with a social security agreement with the UK can count towards these residency requirements.
How inherited State Pension is calculated
The way an inherited State Pension amount is calculated depends on when the deceased partner reached State Pension age.
Deceased reached State Pension before 6 April 2016
Calculate inherited Basic State Pension:
- Check deceased partner’s National Insurance contribution record
- Determine if they qualified for full or partial Basic State Pension
- Surviving spouse inherits this amount (full or partial)
For example, if the deceased qualified for the full Basic State Pension, currently £137.60 per week (2022/23 rate), their spouse would inherit the full amount.
Deceased reached State Pension age on or after 6 April 2016
Calculate inherited New State Pension:
- Check what the deceased’s New State Pension was
- If they reached State Pension before April 2016, spouse inherits 1/2 of this amount
- If they reached State Pension after April 2016, spouse inherits 1/3 of this amount
For example, if the deceased had a New State Pension of £185.15 per week (2022/23 rate), and reached State Pension age before April 2016, their spouse would inherit £92.58 per week.
Changes that affect inherited State Pension
Once in payment, an inherited State Pension will increase each year in line with whichever is highest of:
- Earnings growth
- Price inflation (measured by CPI)
- 2.5%
However, there are some circumstances that can alter the amount of inherited State Pension being paid:
Inheritor remarries or forms a new civil partnership
If the inheriting spouse or civil partner remarries or starts a new civil partnership, the inherited State Pension may stop being paid. Payment can be restored if the new relationship comes to an end.
Inheritor reaches State Pension age
When the inheriting spouse reaches State Pension age themselves, their own State Pension entitlements become payable. These new entitlements may affect the amount of inherited pension being paid.
For example, their own New State Pension may be offset against any inherited Basic State Pension. Similarly, any inherited New State Pension may affect their entitlement to Category BL pension.
Deferring inherited State Pension
The inheriting spouse can choose to defer taking payment of an inherited State Pension. This will increase the eventual rate, as if it were their own pension.
If deferring an inherited Basic State Pension, the rate increases at approximately 10.4% per year. For inherited New State Pensions deferral increases it around 5.8% per year.
Special cases
There are some special and complex cases around inheriting State Pension from a spouse or civil partner. These include:
- Divorce or dissolution – Rights to inherit may be lost if divorced or partnership is legally dissolved
- Living overseas – Residency rules still apply if inheritor lives abroad
- State Pension age changes – Rise in pension age affects when inheritance can happen
- Pension Credit claims – Inherited pensions may affect single person allowances
It’s a good idea to seek individual guidance when dealing with these specific situations.
Claiming an inherited State Pension
If you believe you’re eligible to inherit part of your deceased partner’s State Pension, you’ll need to make a claim.
To claim an inherited Basic State Pension you’ll need to contact the Pension Service. For an inherited New State Pension claim, contact the International Pension Centre.
Documents you may need when claiming include:
- Your National Insurance number and that of your late spouse or civil partner
- Marriage or civil partnership certificate
- Death certificate of your spouse or civil partner
The exact claim process can depend on your personal circumstances, such as when you reach State Pension age. The claims teams will be able to guide you on the specific details.
Getting advice on inherited State Pension
Rules around inheriting State Pension can be complex, especially with the two-tier system operating.
It’s a good idea to seek guidance from official sources about your entitlements. Useful resources include:
- The government’s guidance on inheriting if someone dies
- Free Pension Wise guidance service
- Advice from independent financial advisors or Citizens Advice
Getting sound guidance can ensure you receive all the State Pension inheritance you’re entitled to.
Conclusion
Inheriting a State Pension from your spouse or civil partner can be complex. While you may not automatically get half of their State Pension, you may still inherit a portion subject to certain rules.
Understanding the criteria around marriage, residency and State Pension ages is key. Seeking professional guidance can help clarify exactly what you might inherit.
With the right information, you’ll be able to successfully claim any State Pension inheritance you’re eligible for.