Will I Inherit My Partner’s Pension?

Do You Inherit Your Partner’s Pension?

Here at The Lost Coin Financial Planning Ltd we’re committed to bringing you the most reliable information in all of our articles. In this one we will talk about the best ways to save for your retirement or post work years. Most people save their whole working life to provide stability for themselves and family’s when it’s time to kick back and relax. So many of us spend our years working contributing towards national insurance and paying into private pensions. Many people save thousands throughout their lives and unfortunately some people don’t get to see the Benefit, so what happens if this does happen and can it be passed on to family?

The long and short answer is YES.

Most private, state and occupational pensions offer people the option of making sure their nearest and dearest Benefit from the cash you have amounted through the years but do the laws for state and private pensions differ?

Different Types of Pensions

STATE PENSION

Usually in most cases when someone passes their state pension automatically stops. Spouses or civil partners may be entitled to claim to inherit funds or beneficiaries but it all depends on how the pension was made up. In more recent years state pension rules were altered and everyone contributes the maximum amount and will receive the maximum amount when they retire. Pre 2016 state pension was split into 2 parts made up of a basic amount and extra amount known as additional state pension in 2016 New State Pension was announced. This is one amount of pension but it depends on your national insurance contributions. You must find out what pension you receive and what it’s made up of before you know if you’re eligible to pass it on.

ADDITIONAL STATE PENSION

ASP also known as additional state pension may have been added to a person’s rate; this can only be claimed if you are a man born before the 6th April 1951 or a woman born before 6th April 1953 again the amount revived will be based on your national insurance contributions. If you do revive your late partners additional pension it will be paid alongside your personal state pension. In some cases it is possible to opt out of the ASP as some employers offer a system where you can pay into a workplace pension. If you fall Into the criteria of the above it’s important to contact any past employers of you or your spouse to find the correct information.

PROTECTED PAYMENTS

Pensions began in 1902 and there have been many changes to the rules and regulations over the years so calculating the part of your state pension that may be eligible to be passed on can get a little tricky but it’s important to know that the old ASP payment is safe (protected). By law you can inherit 50% of the amount if you reached state pension age on or after 6th April 2016 or you could be eligible if your partner passed away on or before this date.

DELAYING YOUR STATE PENSION

Some people delay their state pension and claim it when they’re a little older. This could be a good thing and you may receive more when you decide to claim. It also brings positive benefits for your next of kin if you were to pass while your pension is deferred or whilst claiming at a later date your partner can inherit part of your state pension.

PRIVATE PENSION

Private pensions are so much simpler than state pensions, it just depends on the type of private pension you have or the type of pension that was in place.

Defined Benefit Pension – Beneficiary is usually written into the person’s pension but it all depends on the company’s rules and regulations. It’s a good idea to check with your provider.

Defined Contribution Pension – It all depends on how you access your pension, annuity usually means no one can benefit from your pension but it all depends on your guaranteed payment period if you have a joint annuity they may still revive your payment. If the owner dies before the age of 75 then the beneficiary may still receive a rest of life payment. Drawdown is so much simpler the 75 rule still stands but any funds left after passing can be passed on to the beneficiaries and the money can be accepted in a number of ways.

With a private pension the person who benefits does not have to be your husband, wife or civil partner you can appoint who you would like the money to be passed on to. You can fill in a nomination form taken into account by the company you’re with but inheritance tax will usually have to be paid. All companies have their own rules and regulations so it’s important to check and know your rights.

Categorised in: Pensions

This post was written by duodigitaluk@gmail.com