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spouse pension - deductions

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As a recent widow I am due to receive my husband's pension for three months, then 50% of it for life. Because there was not time to stop his pension payment for the first month ( May )  after he died, that amount has been deducted from my payment. Surely this is wrong, because that pension went into his estate, rather than coming to me? 
Furthermore, although I had informed them of his death in May, his June pension payment was still paid, and went to his frozen bank account. The bank has no record, so that amount has presumably bounced back to the pension company, yet it seems to have been deemed to have been paid out. So they have deducted a second month's pension from my spouse pension.
As I am one of the executors I obviously have been dealing with my late husband's bank, but I consider the pension company should be treating me as two separate entities - as a spouse and as executor. 
What if I had no other resources? I would be struggling financially.
What if I were not the executor ?- I would not even know what was happening
I am not even the sole beneficiary, I am one of three.
Has anyone else come across this muddle?
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Comments

  • msb1234
    msb1234 Posts: 531 Forumite
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    You’re right, it is a muddle! Was the May overpayment returned to the pension company? If not, then as executor you can remove the amount and return it. It’s a debt on the estate. Regarding the June overpayment, it may be too soon for them to see the returned amount. That may well have already have happened and you could get the full amount due in the July payment.
    I’ve found when dealing with my mother’s estate that everything seems to take so long, particularly with financial institutions. 
  • Keep_pedalling
    Keep_pedalling Posts: 16,965 Forumite
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    Any pension over payment does not form part of his estate, and should not be distributed according to the will or included on an IHT return. Technically it should be returned to the pension company and they should treat your payments separately, but it seems they have assumed you are the residuary beneficiary so have received your first payment.

    in this case the bank will have bounced the payment back to them, but they are currently refusing to accept that this has happened so I would lodge a formal complaint with them. Unfortunately payments that are bounced back can take some finding and some form of manual intervention is likely to be required. 
  • Silvertabby
    Silvertabby Posts: 9,141 Forumite
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    edited 2 July 2023 at 9:38AM
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    Deducting your husband's overpayment from your spouse's pension is the wrong way to do it for income tax purposes, apart from anything else.

    The way I used to deal with this would be to bring the spouse's pension into payment as fast as possible, then request recovery of any overpayment from the Estate.  The June payment, having been rejected by the closed bank account, will have been returned to the pension scheme, but may take a while to identify.

    My sympathies to you.  You really don't need this extra hassle at this time.
  • Newly_retired
    Newly_retired Posts: 2,973 Forumite
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    Thank you. I agree with all the above comments.
    No, msb, May’s OP was not returned, as at the time I was informed about the OP no money had been released by the bank. I rang and informed the pension company and they indicated they were happy to wait.
    i raised the issue about the June pension a couple of weeks ago, so it is annoying that it has been dealt with in this way. I have raised it again now it has been deducted from my payment, and if they don’t sort it promptly I will raise a complaint. Even if it is sorted, I think I will still complain for all the reasons stated. 
    There is not yet enough cash available to the estate to pay me May’s pension, as the i itial funds were used for the funeral costs. Some banks will not release funds until Probate is obtained.
    Yes, Silvertabby, it messes up tax arrangements too. 
  • msb1234
    msb1234 Posts: 531 Forumite
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    The pension payments you receive won’t come from your DHs estate though, they will come from his pension provider. 
    I agree they’ve been very muddled about this which is absolutely something I’d also be complaining about. Do you actually need probate if there are no funds in his bank account? Banks that do require probate do so over a certain amount.
  • Newly_retired
    Newly_retired Posts: 2,973 Forumite
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    His current account, and other ( small) savings with that same bank, have been released. Another bank requires a certified copy of the will. A third bank requires Probate. 
  • Newly_retired
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    This still rumbles on. It seemed that the pension provider had sorted it, but then I got a text demanding I repay an amount. I sent them a copy of a letter they had sent me, which seems to have put a stop to the further request for a repayment.
    However, in the meantime the pension provider has wrongly reported the matter to HMRC who think I am going to receive a huge amount of widow's pension putting me into a higher tax bracket!  more bother.....
  • Newly_retired
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    A phone all to the bereavement dept led to their agent offering to get statements sent to me, separating the two accounts- one for the estate, relating to the deceased's pension payments / tax / overpayments  and one for me as spouse getting spousal pension. Instead I got an abrupt letter saying I had agreed to the merging of the two accounts and sufficient figures had been sent to HMRC.
    I want to see if the estate owes me or if I owe the estate regarding the OP. As long as the pension company has balanced thier books they don't care about the recipients.
  • Newly_retired
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    I did write a formal letter of complaint, which led to the June payment issue being sorted and I got a refund as I had repaid too much ( or rather they had taken too much ). So muddled.
    I think another complaint is forthcoming.
  • Marcon
    Marcon Posts: 11,110 Forumite
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    I did write a formal letter of complaint, which led to the June payment issue being sorted and I got a refund as I had repaid too much ( or rather they had taken too much ). So muddled.
    I think another complaint is forthcoming.
    Completely understand how cheesed off you must have been with this utter mess, but what exactly are you hoping to achieve by making another complaint? I know how tempting it must be, but the downside for you (and you're the  one who matters here) is that it just makes the whole sorry tale drag on.
    Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!  
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