State Pension rule can raise payments by £5,000 a year but some are 'missing out'

An FOI request by a pension provider has found that more than two million people are being boosted by a particular rule in the State Pension system

Over half a million people are enhancing their State Pension by more than £5,000 per year through inheritance. A Freedom of Information (FOI) request by pensions mutual Royal London revealed that in the tax year 2023/24, over two million pensioners (approximately 2,027,440) received a payment from an inherited state earnings-related pension scheme (Serps).

This was part of the old State Pension system that allowed people to accumulate entitlement to additional State Pension income. The figures show that around 541,760 pensioners were receiving more than £5,000 annually in inherited Serps payments, including 17,460 who received over £10,000.

If a person's spouse or civil partner passes away, they may be eligible to inherit part of their additional State Pension. This will be paid on top of the surviving spouse's State Pension when they reach the official retirement age, currently 66.

Surviving spouses and civil partners can potentially inherit up to an annual maximum of approximately £11,356.28 (£218.39 per week) for the 2024/25 tax year. For the 2023/24 tax year, the weekly maximum amount of inherited Serps was slightly lower, at £204.68.

The Department for Work and Pensions (DWP) released this data, which was taken from its quarterly statistical inquiry. According to the figures obtained by Royal London, the average annual inherited Serps payment for 2023/24 was £3,377, reports the Daily Record.

Some individuals could be receiving over £20,000 annually in an enhanced State Pension thanks to the inherited pension boost. The 'New State Pension' system, which is more straightforward, was launched in April 2016.

Sarah Pennells, Royal London's consumer finance specialist, commented to say: "This data shows how much of a difference inheriting a Serps pension from your husband, wife or civil partner can make. The worry is that, while more than two million people are claiming inherited Serps, others could be missing out.

"Understanding the rules is key to boosting your retirement income." She added: "As we continue to adapt to the new system introduced in 2016, which focuses on individual entitlements, understanding the legacy of Serps and its relevance for thousands of retirees remains crucial."

Royal London recommends that anyone uncertain about their inherited Serps entitlements should get in touch with the Pension Service to discover what they're entitled to - comprehensive information is available on GOV.UK here.

State Pension payments 2025/26

State Pension payments for the year 2025/26 saw an increase in the weekly payment rates starting from April 7.

Full New State Pension

• Weekly payment: £230.25 (from £221.20)
• Four-weekly payment: £921 (from £884.80)
• Annual amount: £11,973 (from £11,502)

Full Basic State Pension

• Weekly payment: £176.45 (from £169.50)
• Four-weekly payment: £705.80 (from £678)
• Annual amount: £9,175 (from £8,814)