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Teacher's Pensions and widow's pension

13

Comments

  • xylophone
    xylophone Posts: 45,746 Forumite
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    Incidentally, are you saying that your mother's State Pension alone is £12,557 per annum?

    It's just that it seems rather high considering that she would have  reached SPA around 2002 under the Old Scheme  and having been a member of two DB pension schemes in her own right would have accrued no SERPS between 1978 and 2002 when she reached SPA.

    Your late father was also a member of a DB Scheme so it is likely that he too had accrued little additional State Pension for her to inherit.

    What was shown as the Contracted Out Deduction on her Increase in Benefits letter for 2022/3?

    And the total weekly state pension?
  • If the Teacher's pension scheme member continued in service after 1 January 2007 or started after that date and then died, the surviving spouse or civil partner is entitled to the TP survivor's pension for life, irrespective of future remarriage or cohabitation.  I am in this position and I checked with TP because my wife who was a biology teacher died in 2013.  She was a teacher for 32 years and paid her pension contributions for her whole working life.  As a result this money, that could have been part of our household, went into her pension.  Why should I as her surviving husband forfeit that money that she contributed and I could have benefited from?  That is the rationale for the survivor's pension and no longer penalising remarriage.

    If the teacher retired before that date then the pension will cease on remarriage.  It is quite cruel in that case but I am afraid that is the situation.

    You might want to read this article by Steve Webb:
    Should widowers forfeit partner's pension if they remarry? Steve Webb replies | This is Money
  • xylophone
    xylophone Posts: 45,746 Forumite
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    If the teacher retired before that date then the pension will cease on remarriage.

    This is indeed the case.

    I  knew a lady whose teacher husband died  when she was in her late fifties and she benefited from a widow's pension,

    She developed a devoted relationship (which lasted until she herself died) with a fellow member of her church fellowship group but chose not to remarry because of the  diminution in income such a step would involve.

  • Yorkie1
    Yorkie1 Posts: 12,239 Forumite
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    Thanks @xylophone. I have partial documents which she has brought with her over Christmas - I'll get her to have a rummage when she gets home.
  • xylophone
    xylophone Posts: 45,746 Forumite
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    I have partial documents which she has brought with her over Christmas - I'll get her to have a rummage when she gets home.

    At least the problem is barely two years old....


    https://forums.moneysavingexpert.com/discussion/6115191/requesting-hmrc-treat-backdated-pension-as-earnt-in-tax-year-it-was-originally-due-help-please

    https://forums.moneysavingexpert.com/discussion/comment/78851973/#Comment_78851973

  • xylophone said:

    .... chose not to remarry because of the  diminution in income such a step would involve.

    Seems so unfair doesn't it?  On the one hand the virtues of marriage are extolled and yet on the other the financial system does not incentivise certain people to do so.  If this applied to me I would suffer a drop of income of £730 per month - a huge amount to me.  "Fortunately" ( if I can use such a word regarding the death of my wife) she contributed into the TP until December 2013 so I will continue to get the pension if I remarry,
  • hugheskevi
    hugheskevi Posts: 4,601 Forumite
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    edited 28 December 2023 at 7:39PM
    xylophone said:
    If the teacher retired before that date then the pension will cease on remarriage.

    I  knew a lady whose teacher husband died  when she was in her late fifties and she benefited from a widow's pension,

    She developed a devoted relationship (which lasted until she herself died) with a fellow member of her church fellowship group but chose not to remarry because of the  diminution in income such a step would involve.

    I do hope she did not decide to live with him either - that would also fall foul of the rules.

    It slightly reminds me of the widows' boxes in Buenos Aires theatre - boxes which are completely screened off to external view as widows were expected to isolate themselves from society for about 2 years after their husband's death back at the time the theatre was built.
    xylophone said:

    .... chose not to remarry because of the  diminution in income such a step would involve.

    Seems so unfair doesn't it?  On the one hand the virtues of marriage are extolled and yet on the other the financial system does not incentivise certain people to do so.  If this applied to me I would suffer a drop of income of £730 per month - a huge amount to me.  "Fortunately" ( if I can use such a word regarding the death of my wife) she contributed into the TP until December 2013 so I will continue to get the pension if I remarry,
    The counter-argument is that those were the rules that the pension was accrued and paid for under - the cost of changing the rules to make them more generous would be picked up by today's employers and employees and what is the justification for that.

    Although my personal view is that whilst the above is a good starting principle, a degree of pragmatism needs to be shown as societal norms change, especially when the costs of small changes will be trivial in the overall context of a scheme.
  • xylophone
    xylophone Posts: 45,746 Forumite
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    I do hope she did not decide to live with him either 

    I don't know about that but they certainly shared their lives  - postcards and such always signed from both.

    And I should have said very early fifties because as I recollect now, she was a widow for only a decade or so before she passed away.

    I remember thinking how sad it was for her sons that they lost both parents  to cancer at such relatively young ages.

    With regard to the Schemes which used to deny a continuing widow's pension on remarriage, this strikes me as very unfair - after all, the contributor had always expected his relict to benefit from his pension and the Scheme funding must have been predicated on a pension for life to these women - remarriage in the light of that fact seems irrelevant.
  • Yorkie1
    Yorkie1 Posts: 12,239 Forumite
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    xylophone said:
    I'm also not confident in how to apportion the amounts on an accruals basis for the two tax years as advised in the link above.
    See
    https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim75020

    Before approaching HMRC, get together all information concerning your mother's income and liability for tax in the tax year 2022-23.

    There should be P60s for the TPS pensions, the LGPS pension and the annuity.

    You can check her state pension situation from the Increase in Benefit letter she would have received in around  March 2022 concerning payments for 22/23.

    Because the TPS Widow's Pension  did not stop until July, you should know from her April/May/June receipts how much the pension should have been - presumably there was a letter from TPS in April or thereabouts showing the pension increase for the year and also a payslip for the first month of the tax year showing the gross/net/tax code?

    Have TPS now provided a statement showing the gross monthly for the current tax year?
    xylophone said:
    Incidentally, are you saying that your mother's State Pension alone is £12,557 per annum?

    It's just that it seems rather high considering that she would have  reached SPA around 2002 under the Old Scheme  and having been a member of two DB pension schemes in her own right would have accrued no SERPS between 1978 and 2002 when she reached SPA.

    Your late father was also a member of a DB Scheme so it is likely that he too had accrued little additional State Pension for her to inherit.

    What was shown as the Contracted Out Deduction on her Increase in Benefits letter for 2022/3?

    And the total weekly state pension?
    Okay, I've now spent some time at Mum's going through everything I can find in her folders.

    Tax year 2022-23:

    State Pension
    • Basic State Pension £141.85
    • Pre-97 Additional SP £125.53
    • Less COD £58.40
    • Total payable £67.13
    • Graduated retirement benefit £5.97
    • (plus 25p per week from mid May on reaching 80)
    • Amount each week = £214.95
    I have got the April 2023 P60 for her own Teachers' Pension. It was tax code 1T at the end.

    Here is the info for the Widows' Teachers' Pension:
    • From April 2022 letter:
    • Basic pension rate £18038.04
    • Pre1988 GMP £1614.34
    • Post1988 GMP £1422.2
    • Total pension £21074.58
    • Make up of pension this month £1736.38, tax £347.20 (code BR)
    • P60 April 2023 - Pension £5248.82, tax deducted £1046.60 (final tax code BR)
    I have got the April 2023 P60 for her Annuity.

    I have not got the P60 for the LGPS / Herts CC pension (in fact, there is no paperwork since about 2018, but it is still paid!)

    Tax year 2023-24:

    State pension - all elements went up (letter March 23; COD went up to £59.22)

    Her own TP: Can confirm no pre or post GMP elements. Tax code was changed from iT to K1532 X in November after the back payment of pension on the Widows' TP.

    Widows' TP: 
    • No opening letter (as the payments had been suspended)
    • November 2023 letter (after the pension arrears had been paid and the pension reinstated):
    • Advice of payment 28/11/23 - Gross £31039.02, tax £6207.80, Other deductions £23302.03, Net £1529.19 (she had received £23302.03 on 10/11/23)
    • Next payment on 28/12/23 - Gross £191.59, Deductions £382.20, (Net £1529.39), Make up of Pension - long term pension £1579.29 / long term PI £332.30
    • There are no other payslips
    • Tax code BR
    Tax year 2024-25:

    Her own TP: £21232 added to her pension (to repay extra £2046 tax), resulting in a tax code of K2122
    Widows' TP: tax code BR
    Annuity and Herts CC: tax code D0 each.

    Next steps:
    1. Do we need to obtain the P60(s) from Herts CC for all relevant years?
    2. Do we need to ask TP to apportion the arrears between the two tax years?
    3. Or do we have enough to go to HMRC now and ask them to do the recalculation?
  • xylophone
    xylophone Posts: 45,746 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    With regard to no GMP shown on your mother's own TPS, presumably she did not accrue this pension until after 5/4/97?

    Does the same apply to her LGPS pension?

    If so, that is why she has no COD/GMP in her own right  but because your father was a member of the scheme between 1978 and 1997  and she became entitled to a widow's pension  mostly accrued during those years,  she has also inherited a  proportion of his GMP/COD - see

    https://forums.moneysavingexpert.com/discussion/comment/79022643/#Comment_79022643

    I am surprised that your mother has no P60 in respect of her LGPS pension - it might be worth enquiring about this.

    There is never a P60 for a state pension.

    I would ask TPS to confirm the arrears arising in both tax years.

    Once that is done, it seems to me that you have enough information to approach HMRC.

    It is a matter of establishing what her income/tax situation would have been in the years in question had her pension not been suspended.

    Presumably your mother has now received a letter confirming her state pension for the year 2024/5.

    The Personal Allowance for 24/25 has been frozen at £12,570 - her SP for 22/3 was already more or less equal to this and will now be in excess of it.

    She should also be receiving increases on her TPS pensions and the LGPS pension. Is her annuity income flat?

    Incidentally, what is your mother's position in respect of savings/dividend income?

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