Can wife's pension be transferred upon death?

dutchism1958

I gave up work 4 years ago to care for my wife.I am 58,my wife is 80.
My wife retired 12 years ago with her full state pension and her private pension from her business.
The scheme is a Group Self Employed Retirement Annuity with Norwich Union(now Aviva) and is not contracted out of SERPS.It is a with profits contract.
The transfer value was £250,000 upon commencement and she is taking a pension of £17.500 per annum.
Because of the uncertainty of me getting another job,given my age and not having worked for 4 years she is wondering whether this pension could be transferred into my name when she passes away.
I have a final salary pension which I could draw early and savings,so would not be destitute and I have the full 35 years of NI contributions for the state pension.
Thank you in advance.

Linton

It's too late to ask the question now that the pension is in payment. Before the payments started any spouse benefit would have been agreed as part of the deal. She should check the paperwork.

molerat

You need to check if it is a joint annuity with spouse payments on death of the annuitant. You also need to get an up to date state pension estimate, 35 years NI payments may not mean a full SP especially as you mention final salary pension which usually means contracted out with the linked COPE deduction.

jamesd

She should ask Aviva exactly what she has because she might have a relatively uncommon type of annuity where all terms are not determined on a single fixed purchase date.

This is prompted by the impossible since April 2016 mentioning of being contracted out - now abolished and in any case only relevant when paying in - and by the mention of with profits. With profits is also usually only relevant when paying in but there are some exceptions. She just might have one of those exceptions.

If she did not get one of those relatively uncommon products she would have chosen what to get and who will get it at the time of purchase and can't now change it. The base option that starts out paying most is a single life level annuity. Single life means it stops paying out when she dies. Level means no increases with inflation.

She could have opted for a dual life annuity which would pay you a reduced pension after her death. Because you are so much younger than her this would mean that the likely time in payment would be a lot longer and so the initial income level so would also be far lower. With such a large difference, life insurance on her with you as beneficiary would probably have looked like a better approach.

If she does not have one of the relatively uncommon products I suggest that she helps to fund state pension deferral for you and takes out a life insurance policy with the help of an IFA. Do not go for an "over 50s" policy, they are very poor value for money.

jamesd

For a person of your age who was contracted out there is no 35 years full level. That number only applies to those with a full working life in the flat rate system which only started on 6 April 2016.

Instead, get your state pension forecast and tell us what it says. Your actual cap is the full flat rate, however many years it takes to get there. For a person who was contracted out that normally means that your entitlement today is less than the flat rate cap and will continue to increase as long as you get credits or buy years from 6 April 2016, but not earlier years.

dunstonh

The scheme is a Group Self Employed Retirement Annuity with Norwich Union(now Aviva) and is not contracted out of SERPS.It is a with profits contract.

You mean the scheme was that. It ceased to be that when she purchased her annuity (or other method).

Because of the uncertainty of me getting another job,given my age and not having worked for 4 years she is wondering whether this pension could be transferred into my name when she passes away.

As she is 80, this means she almost certainly doesnt have this pension any more. It will likely be an annuity. 99% of pensions were converted to annuity if they had not been commenced by age 75 prior to the pension freedoms in 2015.

dutchism1958

Thank you for all your replies,it is much appreciated.
Jamesd,the forecast for my state pension was given as £5795.40 when I finished work in 2012.Since then I have been earning credits towards my pension,as you rightly say.
I will ring Aviva tomorrow and HMRC for an update and let you know.
Thanks.

Silvertabby

I will ring Aviva tomorrow

dutchism1958 - I doubt Aviva will tell you if your wife's annuity includes a spouse's pension for data protection reasons. Can your wife ring them instead? Otherwise, the original paperwork should tell you if the annuity was single life only or included spouse's benefits.

dutchism1958

Again many thanks for all your helpful replies.
Aviva have confirmed the terms cannot now be changed , it is not a joint annuity.
Regarding my state pension jamesd, HMRC have confirmed that up to 5th April 2016 my state pension is £128.95 per week and this will rise to £155.65 per week(which is the maximum I can earn) to April 2024 when I am 66. As a carer I am receiving credits towards this.

We are going to approach an IFA for a Life Insurance policy as suggested.

jamesd

Thanks for the update. No surprise, that was by far the most likely answer and also a sensible choice by her.

Either decreasing term insurance or family income benefit just for the years until you reach normal retirement age for your pension and maybe the state pension may be useful. Because these pay out only during the term and the amount they have to pay decreases over time if she hasn't died yet the cost is likely to be fairly low compared to alternatives.

It is also worth considering whether she should defer her own state pension, which may seem odd for an 80 year old! Only if her health seems OK, do not do it otherwise. The reason for this is that you get to inherit some, usually most, of the increase from deferring. The exact portion depends on the exact composition of her state pension and she'd have to ask DWP. This is interesting in part because her state pension will increase by 10.4% per year of deferral but if you defer your own it will only increase by 5.8% per year of deferral, both pro-rated for partially years. So even after some reduction, her deferring and you inheriting some of the increase is likely to be better value for money than you deferring directly. A person who has claimed their state pension is still allowed to start deferring once.

dutchism1958

Many thanks jamesd.
Unfortunately my wife's health is not the best following a big heart attack and this year a stroke so deferring her state pension is probably a non-starter as you suggest.
The Family Income Benefit may be best until I take my state pension at 66 and/or initiate my final salary pensions depending on my wife's health in the future.
I will read up on this myself but are there any major pitfalls or issues I need to be aware of or things that I should consider more strongly.
Thanks in advance!.