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The inheritance rule that could boost your pension by more than £5,000 a year
Pension provider urges retirees to check if they're missing out on additional payments
The pension provider Royal London is urging people to check if they are missing out on extra state pension payments.
New figures reveal more than half a million pensioners are inheriting more than £5,000 a year from the State Earnings-Related Pension Scheme (Serps). The Serps let workers build up additional state pension income, but is no longer in operation.
If someone paid into the Serps, part of their pension can be inherited by a surviving spouse or civil partner, yet many people don’t realise they can claim.
Here, Which? explains who qualifies and how to find out if you can claim.
How the Serps worked
The Serps was introduced in 1978 to allow employees to build up an additional state pension income on top of their basic state pension.
It was later replaced by the State Second Pension (S2P) in 2002, before being scrapped in 2016 with the introduction of the new state pension system.
People who retired before April 2016 receive a combination of the basic state pension and an earnings-related additional state pension, which could come from the Serps or its successor, S2P.
Under the old state pension system, some of the additional pension built up through the Serps can be inherited by a surviving spouse or civil partner.
The amount passed on depends on how much the deceased had accrued, their date of birth, and when they died.
- Find out more: additional state pension explained
How much could you inherit?
Surviving spouses and civil partners can potentially inherit at least 50% of certain state pension benefits, up to a maximum of £11,356 (£218 per week) for the 2024/25 tax year.
This is in addition to any state pension they are entitled to themselves. As a result, some pensioners could receive a total state pension of £22,858 a year.
New figures obtained by Royal London via a Freedom of Information request reveal that more than two million pensioners received an inherited Serps payment in 2024.
Of these, over half a million (541,760) inherited more than £5,000 a year, while 17,460 received over £10,000.
The average inherited Serps payment for 2023/24 stood at £3,377.
The table below shows the number of recipients that receive inherited money from the Serps in 2024.
| Annual inherited Serps payment | Number of recipients |
|---|---|
| £0-£999 | 483,880 |
| £1,000-£1,999 | 268,080 |
| £2,000-£2,999 | 263,760 |
| £3,000-£3,999 | 256,180 |
| £4,000-£4,999 | 213,780 |
| £5,000-£5,999 | 176,400 |
| £6,000-£6,999 | 140,180 |
Source: DWP FOI data 2024. Numbers have been grossed up to 100% and rounded to the nearest 10.
Who can inherit Serps income?
If your spouse or civil partner dies, you may be able to inherit part of their Serps pension, but the amount depends on when they were born and when they died.
However, you cannot inherit the money if your late spouse or civil partner remarried or entered a new civil partnership before reaching state pension age.
- If they died before 6 October 2002, you may inherit up to 100% of their Serps income.
- If they died on or after 6 October 2002, the maximum amount you can inherit is based on their date of birth, as shown in the table below:
| Man's date of birth | Women's date of birth | Maximum % of Serps income you can inherit |
|---|---|---|
| 5 October 1937 or before | 5 October 1942 or before | 100% |
| 6 October 1937 to 5 October 1939 | 6 October 1942 to 5 October 1944 | 90% |
| 6 October 1939 to 5 October 1941 | 6 October 1944 to 5 October 1946 | 80% |
| 6 October 1941 to 5 October 1943 | 6 October 1946 to 5 October 1948 | 70% |
| 6 October 1943 to 5 October 1945 | 6 October 1948 to 5 October 1950 | 60% |
| 6 October 1945 and after | 6 October 1950 and after | 50% |
- Find out more: how much the state pension is worth
Are you missing out?
Royal London is urging people to check if they are eligible, as many may not realise they can claim.
Sarah Pennells of Royal London says: ‘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.’
If you’re unsure what you’re entitled to, you should contact the Pension Service with details of your late spouse or partner’s National Insurance contributions and pension history.
- Find out more: how to check your state pension forecast
Boosting your pension with voluntary NI contributions
If your National Insurance (NI) record is incomplete, you may be able to boost your state pension by making voluntary Class 3 contributions.
Normally, you can only pay for gaps from the past six tax years, with a deadline of 5 April each year. However, a temporary rule introduced in 2014 allows some people to buy back missing years as far back as 2006-07.
This deadline has been extended several times, but expires on 5 April this year.
Voluntary contributions won’t always increase your pension, so it’s important to check whether it's worth topping up first.
A new government tool now makes it easier to review your record and fill any gaps.
- Find out more: should I top up my state pension?
