Retired mother worried about small pension, advice please

xylophone

https://forums.moneysavingexpert.com/discussion/comment/69889814#Comment_69889814

https://forums.moneysavingexpert.com/discussion/comment/69795356#Comment_69795356

My stepfather was a keen investor in the past and so has a few things which we are going through

It seems that there are investments which (one assumes) will benefit his wife after he passes on.

margaretclare

especially when they talk of changes coming and what ages it effects.

It is my understanding that people who are receiving state pension already will not be affected by any coming changes. These will only affect people who haven't yet reached retirement age.

As xylophone has said, your mum will be able to inherit 100% of her husband's SERPS. This is really well worth having, and would apply if my DH should depart this mortal coil before me. His SERPS is worth as much again as his basic state pension. He could also inherit mine, but mine isn't as much because I was opted-out into work pension during my working life. He wasn't.

happyhero

Wow, thank you very much guys for all the help. My mother has just added another question, sorry, she has just received a letter from the Pension Service about general increases in benefits and in that letter is a leaflet with one heading “How to top up your current State Pension”. It says you can choose to top up your additional State Pension by up to £25 a week for life if you are eligible for a UK State Pension and that you can do this if you are a woman born before 6th April 1953, which she is. This is until 6th April 2017.

Is this something she should be interested in doing bearing in mind the information I have given above and that she should end up with 100% or possibly more of my Stepfathers pension anyway?

xylophone

See https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/467544/state-pension-top-up--guidance-for-advisers-oct-2015.pdf

audigex

happyhero wrote: »

Wow, thank you very much guys for all the help. My mother has just added another question, sorry, she has just received a letter from the Pension Service about general increases in benefits and in that letter is a leaflet with one heading “How to top up your current State Pension”. It says you can choose to top up your additional State Pension by up to £25 a week for life if you are eligible for a UK State Pension and that you can do this if you are a woman born before 6th April 1953, which she is. This is until 6th April 2017.

Is this something she should be interested in doing bearing in mind the information I have given above and that she should end up with 100% or possibly more of my Stepfathers pension anyway?

It's certainly something she would benefit from researching.

The real question is how much it costs to top that up and how long she reasonably expects to live. Compare the two (and err towards an optimistic lifespan), and see whether she'd be better off just putting it in a savings account with a standing order to transfer 100 a month to her main account.

atush

xylophone wrote: »

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.

It is very much a shame, given women tend to live longer, he didnt think about making sure at least one paid out after death.

This is one thing I hope pensionwise are covering.

Be_Happy

If your mother is considering paying a lump sum to top up her state pension, then she should consider getting your stepfather to top up his state pension instead of her topping up hers. At his age, your mother will inherit 100% of the extra top up amount. There is a big difference depending on age.

At age 89 the amount required to get a £25 per week top up is £7,275 whereas at age 77 it would be £15,625.

You should look into this and check the figures out with your mother and stepfather's circumstances.

EDIT

Should add - be very careful about buying top up if the extra amount gained would bring anyone who may have been entitled to pension credit, over the limit. Several extras go with the Guaranteed Pension Credit eg housing benefit, You would lose more than the amount gained by topping up.

ChemistDude

Maybe your mom can move in with you? Thats what my parents have done :S I'm only 30 and married too. Ah well they did give us a house deposit.