UK Pensioners Receive Secret £5,000 Bonus—Here’s How to Check If You Qualify

More than 500,000 pensioners in the UK are benefiting from an extra £5,000 a year through a lesser-known state pension inheritance rule, according to recent reports.

This financial boost comes from the State Earnings-Related Pension Scheme (SERPS), which allows surviving spouses and civil partners to inherit a portion of their late partner’s pension entitlement.

While many retirees remain unaware of this entitlement, data from the UK government confirms that thousands of pensioners are receiving significant additional income through this pension loophole. Here’s how it works and who can benefit from it.

What is SERPS and How Does It Work?

The State Earnings-Related Pension Scheme (SERPS) was introduced in 1978 as an earnings-linked supplement to the basic state pension. It was later replaced by the State Second Pension (S2P) in 2002, before being absorbed into the new state pension system in 2016.

While SERPS itself no longer applies to new retirees, those who contributed before 2002 may have built up substantial entitlements. In certain cases, surviving spouses and civil partners can inherit part of this pension, increasing their annual retirement income.

How Much Can Be Inherited?

The amount of SERPS inheritance depends on when the deceased partner passed away and their date of birth:

• If the partner died before October 6, 2002, their spouse could inherit up to 100% of their SERPS entitlement.
• If the partner died after this date, the percentage inherited is capped at 50% to 90% depending on their age.
• Those who reached state pension age before April 6, 2016, may still inherit a portion of their partner’s additional pension.

Notably, government figures show that:

• 541,760 retirees received over £5,000 annually through SERPS.
• 17,460 pensioners received over £10,000 a year from inherited payments.
• The average additional payment per pensioner was £3,377 per year.

Who is Eligible to Receive These Payments?

To qualify for SERPS inheritance payments, a person must:

• Be married to or in a civil partnership with the deceased at the time of their death.
• Have a partner who contributed to SERPS before 2002.
• Have reached state pension age themselves.
• Not be receiving the new state pension, which generally does not allow SERPS inheritance.

It is essential for surviving spouses and civil partners to check their pension entitlements, as thousands may be missing out on extra payments they are legally entitled to.

How to Claim Your Extra Pension

If you believe you may be entitled to inherited SERPS payments, follow these steps:

1. Review Your Pension Statement: Check if your late partner paid into SERPS.
2. Contact the Pension Service: Call 0800 731 0469 or visit the official Pension Service website.
3. Apply for Adjustments: If you are eligible, the Department for Work and Pensions (DWP) will adjust your pension accordingly.
4. Seek Financial Advice: Consulting with a pension specialist can ensure you maximize your entitlement.

Why Aren’t More Pensioners Aware of This?

Despite being a significant financial benefit, many pensioners remain unaware of SERPS inheritance rules. Reasons for this include:

• Complex pension rules that have changed multiple times over the years.
• Lack of proactive government outreach to inform eligible pensioners.
• Confusion between old and new state pension systems, which have different inheritance policies.

Pension experts recommend that surviving spouses and civil partners double-check their pension records and seek advice if they are unsure about their entitlements.

More details on inherited pension benefits

Final Thoughts: Don’t Miss Out on Extra Income

The SERPS inheritance loophole has allowed hundreds of thousands of pensioners to claim an extra £5,000 or more annually, significantly improving their retirement income.

If you or someone you know may be eligible for SERPS inheritance payments, it’s important to act quickly and verify your entitlement through the Pension Service.

This article has been carefully fact-checked by our editorial team to ensure accuracy and eliminate any misleading information. We are committed to maintaining the highest standards of integrity in our content.