Retired mother worried about small pension, advice please

happyhero

Hi I’m after advice for my Mother if anybody can help, basically she is worried what would happen if anything happens to my Stepfather. She recalls that my Father was supposed to make payments on her behalf a long time ago and didn’t and so her state pension is short.

At present my Mother and Stepfather own their own house, my Stepfather gets a state pension of £172.89 per week and my mother gets a state pension of £82.54 per week. My mother is 77 and my Stepfather will be 89 soon and is not in great health.
My mother worries that she would struggle on her pension and we’ve heard that you can buy years etc.

I usually help them with all their finances and have a fairly good understanding of these type of things but I must admit I struggle a bit with understanding everything that is possible with pensions, especially when they talk of changes coming and what ages it effects.

What would happen to the pensions if anything happened to my Stepfather?

Is there anything she could do now to increase hers, and if so what sort of cost would it be?

Should she do anything now about her small pension?

Any advice or help appreciated.

cte1111

As your Mum is already drawing her state pension, I don't think she can buy extra years at this point. There are various other ways though that your Mum's income would be likely to be increased, if she were widowed.

When my Dad died, my Mum's state pension was increased, as he had paid in for some years that she had not. I think this is quite a complex area and I don't know exactly how it would work, given that your Mum has had 2 husbands. I think the Pension Advisory Service might well be able to help your Mum work out if this would help increase her pension, if she were to be left a widow.

Secondly, Pension Credit is a benefit that ensures that all pensioners receive a minimum weekly income. For single people, this is £151.20 a week. This means that your Mum would receive a minimum of this amount each week, through a combination of her pension and pension credit.
https://www.gov.uk/pension-credit/overview

If your Dad was meant to provide a pension contribution, then it would be worth your Mum looking up the details of their divorce settlement and seeing if there is more information in there. It might be that there was an agreement to split his work pension or similar, in which case she could still look into having this enforced.

If they haven't already, it would be a good idea for your Mum and step Dad to set up an emergency fund, so that if one of them did die, there would be some savings to pay for the funeral and also to get the survivor through the initial period where their income is likely to drop.

PasturesNew

As has been said above, her pension would most likely be made up via Pension Credit, to the minimum of £151/week. So that's £650/month in her hand. She'd most likely also get council tax paid, so another £100-120/month's worth.

Better than working full-time!

xylophone

Your parents are both receiving their state pensions under the current scheme. It appears that your mother's state pension is based on her own contributions but that she did not pay/was not credited with enough for a full state pension.

If your father predeceases her, she should be able to apply to use his contribution record rather than her own as his is better.

https://www.savvywoman.co.uk/1594/what-happens-to-your-state-pension-when-you-die/

https://www.gov.uk/statepensiontopup

http://www.telegraph.co.uk/finance/personalfinance/pensions/10756794/Should-you-buy-extra-25-a-week-in-state-pension.html

xylophone

With your mother's permission, you could ring the DWP to discuss the matter.

xylophone

As has been said above, her pension would most likely be made up via Pension Credit, to the minimum of £151/week.

She can apply to use her husband's contribution record for BSP and in view of his age, will inherit 100% of his SERPS - it would appear therefore that her income would be in excess of the Pension Credit threshold?

greenglide

She can apply to use her husband's contribution record for BSP

This happens "automatically" when DWP are notified of his death, assuming that he pre-deceases her. At the same time she would inherit most or all of his AP which should give her close to the £170 that he gets now. If she has some AP herself (this is possible even though she has not got a full NI record) she could even get slightly more than he is now.

atush

Does your stepfather have any private pensions?

audigex

PasturesNew wrote: »

As has been said above, her pension would most likely be made up via Pension Credit, to the minimum of £151/week. So that's £650/month in her hand. She'd most likely also get council tax paid, so another £100-120/month's worth.

Better than working full-time!

Not really... UK minimum wage full time (40 hour week) would be as near as makes no difference £1,000 a month takehome. That's quite a lot more than the equivalent of £730-800 (taking council tax/lack thereof into account).

xylophone

she could even get slightly more than he is now.

Indeed - which is why I said

it would appear therefore that her income would be in excess of the Pension Credit threshold?

xylophone

Does your stepfather have any private pensions?

https://forums.moneysavingexpert.com/discussion/comment/69963133#Comment_69963133

It appears that there are a couple of single life annuities that end with his death.