Qualifying years and spouse "inheritance"

MrAnalogy

Sorry if it has been asked before, but I am very concerned about this element of the new pension proposals for simplification.

I am 59 this year, have 30 qualifying years, and a State Retirement age just prior to my 66th birthday.

My Wife has already reached retirement age, and due to paying "Married Women's Contributions" throughout her working life apart from 25 years with organisations with pension plans, she receives the princely sum of about £60 per annum.

I no longer work on health grounds, so live on savings created by down-sizing, but hoped that if I reached retirement age we would get a married couples pension.

My belief was (and my financial planning was based on this), that if I did not live long enough to reach retirement age (due to health issues) then my wife would be able to claim a full pension based on my qualifying years (or whatever it would be at the time of my demise).

My concern is that with this talk of doing away with pension "inheritance" that if I did pre-decease my retirement age then my wife would get nothing at all from my contributions.

If this is the case then to ensure a reasonably fair deal from the Government then I should try to ensure "popping my clogs" prior to 2017! :sad:

I would be grateful if anybody is in a positon where they might be able to clarify this particular situation.

Thank you.

sleepless_saver

Have a look at paragraph 28 onwards of the DWP proposals. (pdf file). Para 42 appears to confirm that your plan would still work if you did die before you reach state pension age.

bilbo51

MrAnalogy wrote: »

... she receives the princely sum of about £60 per annum.

Really? It must cost at least ten times that to administer it.

sleepless_saver

MrAnalogy wrote: »

I am 59 this year, have 30 qualifying years, and a State Retirement age just prior to my 66th birthday.

My Wife has already reached retirement age, and due to paying "Married Women's Contributions" throughout her working life apart from 25 years with organisations with pension plans, she receives the princely sum of about £60 per annum.

Have you and your wife checked if you are jointly eligible for pension credit now? https://www.gov.uk/pension-credit-calculator

MrAnalogy

Thank you for your responses. A quick aside to Bilbo51 - I suppose they cut down costs by only paying it annually

To sleepless saver - thank you for pointing me in the direction of that PDF file - interesting, but perhaps I am being a little dense today as all I could find was confirmation of the removal of contribution "inheritance"

"35. Under the single-tier pension three of the most complex elements of the current system will end. These are:
• the two-tier system of basic State Pension and State Second Pension, including the option to contract out of the State Second Pension;
• the Savings Credit element of Pension Credit; and
• the ability to derive, inherit, or share a pension based on National Insurance contributions of a spouse or civil partner.

• An individual pension
The single-tier pension will be based solely on an individual’s own National Insurance records – it will not be possible to derive or inherit single-tier pension from a spouse or civil partner. The vast majority of men and women now have the opportunity to gain a full pension using their own National Insurance record. There will, however, be transitional arrangements to recognise shared or inheritable additional State Pension in the current system, and for certain women who have paid reduced rate National Insurance contributions."

With regard to para 42...

"42. The reforms will mean that an individual will have confidence that, with 35 qualifying years of National Insurance contributions or credits, they will be able to retire on a state pension that lifts them clear of the basic level of means-tested support and keeps them above it throughout their retirement. This is because the full weekly amount of single-tier pension will be uprated at least in line with earnings, so would hold its value relative to the earnings-uprated means test."

I am not quite sure how this confirms that my dying before my retirement age in August 2020 still allows my Wife to receive any benefit from my contributions?

The transitional information does not seem to refer to this situation at all, as far as I can see?

With regard to Pension Credit - we are not yet eligible due to the aforementioned savings from property downsizing (although the way things are currently going I suspect it will not be too long before we are!)

Anyway - thanks once again for your thoughts (although I must confess my concerns have yet to be allayed )

xylophone

http://www.telegraph.co.uk/finance/personalfinance/pensions/9817508/New-state-pension-how-am-I-affected.html
While the new pension regime won't allow people to "inherit" benefits earned after 2017, the transitional arrangement will ensure that benefits accumulated, or inherited, before this date are still honoured,

sleepless_saver

MrAnalogy wrote: »

To sleepless saver - thank you for pointing me in the direction of that PDF file - interesting, but perhaps I am being a little dense today as all I could find was confirmation of the removal of contribution "inheritance"

No, you're not being dense. It's the section on derived rights starting on page 93. para 31 deals with basic pension, 42 with additional pension. Hope this helps.

atush

If you cannot work due to your health, have you been registered as disabled? Are you getting the right benefits?

MrAnalogy

Thank you all once again for your responses. The Daily Telegraph link was informative, but none of the examples exactly matched our situation (closest one was where the person with the contributions had already retired, but the spouse without not due until post-2017).

Page 93 para 31 looked far more promising (provided I am interpreting it correctly! ) so has allayed my concerns to a fair degree (although who knows how things will be implemented, or what further changes will be made in the next few years), so thank you very much for pointing me to the right place

With regards to benefits relating to health problems - I have an heriditary disease which has led in the last few years to heart attack, dialysis, organ transplant, and diabetes due to the anti-rejection drugs. However, fortunately, I am still pretty mobile and only really incapacitated to a degree by unpredictable extreme tiredness and infections, which makes working not very viable (and tbh I have already exceeded my life expectation by about 5 years already, so do not feel terribly inclined to spend the (hopefully long ) time left doing casual work - my choice).

Thank you all again.

Best Regards

atush

you sound pretty disabled to me, but what do I know?

MrAnalogy

I am very lucky with my health at present, all things considered. Unfortunately I believe there are many people with far, far worse things to contend with than me that are currently facing the threat of losing their Disability benefits under the coming legislation.

I just hope that those that truly deserve it are not denied the assistance they rely upon.