Inheritable parts of pre-2016 state pension please? (More detail available than previous thread)

justcheckin

Many thanks for the help received so far on the other thread I posted: https://forums.moneysavingexpert.com/discussion/6104739/advice-to-help-retired-relatives-in-crisis-please-state-pensions-etc#latest

To follow up, I now have a breakdown of how my Dad's state pension is comprised, and my main concern is to find out how much of this passes to my Mum if he predeceases her.

From his latest statement from the pension service, I can see:

Basic state Pension:      126.62   

My understanding is that she inherits all of this, (if her own NI record is less complete, which it is)

Then the woman I spoke to was saying she gets 60% of his SERPS (due to each of their dates of birth) but I am a bit confused, as I can then see:

Pre 97 additional state pension          56.95
 less contracted out deduction of        18.20

Total payable                                      38.75

Then:

Post 97 additional state pension                34.17
Graduated Retirement Benefit                   8.91

Does she receive 60% of all 3 of these additions? (38.75, 34.17 and 8.91)

Many thanks for any help.

xylophone

Graduated Pension was a form of Additional Pension to which contributions were made between 1961 and 1975.
Additional State Pension pre 2002 was known as SERPS.
After 2002 it was known as State Second Pension (S2P)
As I understand it, she would be entitled to 60% of SERPS, but only 50% of GRAD and ASP  (S2P) accruing after 6/4/2002.
Check with the Pensions Service to be sure of the position.
The reason for differentiating between periods before and after 1997 is that up to 1997, people who were in Contracted Out occupational schemes built up a Guaranteed Minimum Pension. This led to a Contracted Out Deduction being made from ASP when they became eligible for state pension.

You should also check on any entitlement your mother may have from his DB pension.
And what may she be entitled to from the Standard Life Pension?

Incidentally, I notice that your father's BSP is slightly under the full current rate (£129.20) - he must have been slightly short on NI?
When in April 2010 did he reach SPA?

justcheckin

xylophone said:

Graduated Pension was a form of Additional Pension to which contributions were made between 1961 and 1975.
Additional State Pension pre 2002 was known as SERPS.
After 2002 it was known as State Second Pension (S2P)
As I understand it, she would be entitled to 60% of SERPS, but only 50% of GRAD and ASP  (S2P) accruing after 6/4/2002.
Check with the Pensions Service to be sure of the position.
The reason for differentiating between periods before and after 1997 is that up to 1997, people who were in Contracted Out occupational schemes built up a Guaranteed Minimum Pension. This led to a Contracted Out Deduction being made from ASP when they became eligible for state pension.

Thank you this is brilliant, and I am so grateful for the patient explanation. The advisors at the DWP and pensions service were more cursory and I was confused!

You should also check on any entitlement your mother may have from his DB pension. Thank you, yes I have clarified this now at 50% of the smaller pension.
And what may she be entitled to from the Standard Life Pension? None unfortunately.

Incidentally, I notice that your father's BSP is slightly under the full current rate (£129.20) - he must have been slightly short on NI?

Interesting. He thinks he purchased additional years to ensure this wasn't the case. Is it possible this is because the letter he scanned for me today is dated 19/02/19, and so I have missed an increase last April?

When in April 2010 did he reach SPA? 02/04

My answers in italics above. Many thanks.

xylophone

 02/04

Then he would have needed 44 years NI (paid or credited).

The BSP for 2009/10 was £95.25.     For 2010/11 it was £97.65.  2019/20 is £129.30.

It looks as though he'd have needed another year?

xylophone

Looking back on your previous posts, it is clear that there is a lot of debt.
Have you explored debt repayment from their savings to reduce the monthly outgoings?
Have you checked that they are on the cheapest possible tariff for utilities?
And the grocery bill looks high for two people - is there a reason for this?

justcheckin

xylophone said:

Looking back on your previous posts, it is clear that there is a lot of debt.
Have you explored debt repayment from their savings to reduce the monthly outgoings?
Have you checked that they are on the cheapest possible tariff for utilities?
And the grocery bill looks high for two people - is there a reason for this?

Debt repayment from savings, yes I think this is the best thing, but am very concerned this leaves a clean slate from which to do this again. (not rational, but I am emotionally as well as practically involved)
We are systematically reducing monthly spends, and I think there is a £42 pcm potential saving if he can face swapping energy provider.
Groceries, yes absolutely. Am on this as much as is possible.

xylophone

(not rational, but I am emotionally as well as practically involved)

Your concern is perfectly understandable - how very hard it is to stand by and watch in helpless dismay as a loved one makes a complete and utter hash of things!

However, you have already said that both parents are now at a stage where their needs justify an application for AA. Are you indicating that they have much less opportunity for unwise financial activity?

Are both willing to grant you PoA?

And do consider whether selling the property and getting them in to some form of sheltered housing 

would be a possibility. 

Some Local Authorities/Housing Associations /charities have schemes for the elderly - you might check on what is available.