Deferred State pension then passing away before claiming anything

Stubod

Hi all,

I have tried googling what happens if you defer your state pension and then die before claiming it.

Am I right I correct in thinking that your spouse would not actually be entitled to anything? (One article suggests they may get a maximum of 3 months pension)?

Thanks for any replies...

Dazed_and_C0nfused

Did they defer pre or post April 2016?

Fairly detailed guide for pre 6 April 2016 deferrals here.

https://www.gov.uk/government/publications/deferring-your-state-pension/state-pension-deferral-if-you-reached-state-pension-age-before-6-april-2016-and-you-die-extra-information

molerat

If state retirement age was post 2016 then the estate will receive the maximum of 3 months deferred pension. There may be some continuing spouse entitlement to half of any protected pension amount.

Stubod

..ta for the replies...would be post 2016, (just considering whether it is something I should do as and when the times comes).

xylophone

https://www.thisismoney.co.uk/money/pensions/article-9445033/Defer-state-pension-payments-make-thousands-experts-say.html

Some comments by Steve Webb a day or two back.

Stubod

xylophone said:

https://www.thisismoney.co.uk/money/pensions/article-9445033/Defer-state-pension-payments-make-thousands-experts-say.html

Some comments by Steve Webb a day or two back.

An interesting article thanks, but it doesn't seem to mention if there are any benefits for a surviving spouse if you pass on before you start taking it.

xylophone

but it doesn't seem to mention if there are any benefits for a surviving spouse if you pass on before you start taking it.

It does mention it  under the section entitled

Who is generally unlikely to benefit from deferral?

If you reach state pension age on or after 6 April 2016, and if you are single or widowed, you should also bear in mind that if you were to die during a period of deferral your heirs may not be able to access the money you had deferred taking aside from a few months' income 

xylophone

There is another Webb article here (from 2017) addressing the point in detail.

https://www.thisismoney.co.uk/money/pensions/article-4565554/If-delay-state-pension-die-heirs-lose-out.html

Stubod

Hi, and many thanks for the responses....food for thought

jamesd

It's also simple to protect against: buy some term life insurance.

This pays out only if you die within the specified number of years and the payout needed is low, so the price is also low.

soulsaver

Doesn't the report fail to take into account that if you could afford to defer, it implies you don't need to spend the 1st year's pension.

So if you assume you could earn, say, 2.5% pa by investing your earlier access c.£9000 over the same time frame, you'd be well ahead not deferring: £9k @2.5% x 30 years = £19k+