MT pensions advice - from the experts
15/03/2010
Puzzled by your pension? Mature Times is here to help, with the expert assistance of Malcolm McLean Chief Executive of the Pensions Advisory Service.
What happens to my wife when I die?
My wife is currently in receipt of a half pension from my stamp contributions. In the event of my death prior to hers, would she be entitled to the full State Pension? If not, would she be entitled to a widow’s pension and would that be any better than the full State Pension? We are both in our eighties and I have tried my best to ensure that she will be able to manage after my demise; but getting information on the above subject is one of the hardest pieces of info to obtain.
Mr R Venus, Bridgend
I agree with Mr Venus the information about widows/widowers pension is probably not as clearly spelt out as it might be and full marks to him for seeking to get his own position clarified.
However unpalatable the subject it is important that people know what income a surviving partner might have to manage on and plan their finances accordingly if they can in advance.
Based on the ages of the couple and the information provided it would seem almost certain that the widow would inherit the whole of her deceased husband’s basic state pension the whole of any SERPS he was receiving (subject to a maximum weekly SERPS payable to the widow of £154.70p a week at 2009/10 rates) half of any graduated retirement benefit (the forerunner of SERPS) he was receiving.
Women’s pensions
Anyone retiring after April who has 30 years’ NI contributions will receive the full state pension whereas anyone retiring in March will need 39 years.
Therefore my neighbour will receive £95 for 30 years of NI contributions whereas I receive £81 for 34 years of contributions. Are there any plans for the government to even out this gross unfairness?
Sue Breen, by email
The reduction in the number of qualifying years needed to get the full basic state pension takes effect from 6 April 2010 and could be described as a ‘cliff edge’ change.
Only women (and men) who reach their state pension age on or after that date qualify for the new 30-year test. It is entirely to do with your age and not when you actually retire from work that is taken into account. A woman whose 60th birthday was on 5 April 2010 would still need 39 qualifying years, a woman whose birthday was a day later on 6 April 2010 would only need 30.
In response to questions about the impact of this, the Government has repeatedly said it has no plans to change the rules. It claims that the changeover could not have been made in advance of 6 April and, as is frequently the case with pension law, couldn’t be applied retrospectively. Phasing it in going forward from 6 April would not help - it would simply mean more people would miss out and, I suppose if you think about it, wherever you were to draw the line there would always be someone on the wrong side of it.
I can understand your correspondent’s annoyance and sense of unfairness but I am afraid there is nothing she can do about it.