Widow's State Pension

mickflynn39

My mother in law is likely to become a widow in the next few months. We're trying to find out how much state pension she will get when she is bereaved. Her husband has a full NI contribution record and they currently get the married couples state pension and some SERPS (and another Barbara Cartland type pension). She has no NI contributions record. They are both in their seventies.

She will also receive half of his private pension which will amount to £355 per month. He's told me that she will get the same pension that they are currently getting from the state when he is dead. I find this very hard to believe but I'm struggling to find out what the real situation will be.

I need to know because there is currently a £30k mortgage on the property and I need to work out if she will be able to afford to carry on living there. Any advice would be much appreciated.

Torry_Quine

There is no such thing as a married state pension. He will get a full pension at the moment and she will be getting 60% of one from his NI contributions.

When he dies she will con tinue to recieve her 60% pension but not his. If the SERPS are his (which I would assume) then they will most likely stop as well.

Is there no life assurance to pay for the mortgage?

Hope that helps at this difficult time.

mickflynn39

Thanks Torry. No unfortunately there is no life insurance. So basically she will get 60% of £107.45 (the new single persons state pension) as the SERPS are his alone.
60% of 107.45 is £64.47 which works out at £279.37 per month. So she will have £634.37 (279.37 state pension + 355 private pension ) to survive on.

As this will not be enough to get by on do you know if she would be entitled to any benefits or pension top ups? There are no savings to take account of.

anguk

You could see if she'll be entitled to any Pension Credit?

http://www.direct.gov.uk/en/Pensionsandretirementplanning/PensionCredit/DG_10018692

mickflynn39

Thanks anguk. I've used the Pension Credit calculator and it seems she would get an extra £32.28 per week. This makes her monthly income now £774.24. So better, but probably still not enough to get by on, especially as mortgage rates are likely to rise in the future.

anguk

I know this is going to be a terrible time for her but would she be willing to down-size? At least then she wouldn't have the mortgage to pay and the responsibility of a £30k mortgage on her own and in her 70s. What about a little place in a retirement complex? If she sells the house she may be able to buy a flat outright and also there'll be peace of mind and security for her.

Something like this (obviously it would depend how much she sold her house for):
http://www.mccarthyandstone.co.uk/

hugheskevi

When he dies she will con tinue to recieve her 60% pension but not his. If the SERPS are his (which I would assume) then they will most likely stop as well.

I think she will receive 100% Basic State Pension as she will inherit her spouse's contribution record and receive a category B State Pension (see page 14 of this document).

SERPS will also be inherited - this page details what percentage she will get.

margaretclare

She will also receive half of his private pension which will amount to £355 per month. He's told me that she will get the same pension that they are currently getting from the state when he is dead. I find this very hard to believe but I'm struggling to find out what the real situation will be.

He's right up to a point. She will get 100% state pension, the same as he's getting now, not her 60%, and depending on the year they were born she can inherit 100% of his SERPS.

I know this, because DH and I are mid-70s. We each have SERPS, but his is a lot more than mine because he was never opted-out into a works pension as I was. So if he dies first (which I hope won't happen) I can inherit 100% of his SERPS.

What's a Barbara Cartland pension?

Just as a final comment, I sympathise deeply with your MIL. Widowhood is not nice at all, in fact it's something I wouldn't wish on my worst enemy. My worst nightmare is being widowed for a second time, but DH says 'if you go and die before me I'll kill you'. (joke)

mickflynn39

What's a Barbara Cartland pension?

That was a slip up on my part. It's actually a Barbara Castle (she used to be a Labour minister years ago) pension scheme. I think it's a bit like a SERPS scheme.

mickflynn39

Things are a lot clearer now. I've now worked out that she will get a full single person's state pension and not the 60% she is currently getting. She won't get the 60% pension as well. This is where her husband has got it wrong. She will get 80% of his SERPS because of when he was born. I need to re-jig my calculations now to find out how much she will actually have.

mickflynn39

I know this is going to be a terrible time for her but would she be willing to down-size? At least then she wouldn't have the mortgage to pay and the responsibility of a £30k mortgage on her own and in her 70s. What about a little place in a retirement complex? If she sells the house she may be able to buy a flat outright and also there'll be peace of mind and security for her.

I've suggested this to her but she just lives around the corner from us and wants to stay close to us if at all possible.