Thousands of pensioners are receiving more than £10,000 per year from inherited State Earnings-Related Pension Scheme (Serps) payments, new data has revealed.
A Freedom of Information request by Royal London revealed that more than two million pensioners are benefiting from this retirement income boost.
Royal London reports that 541,760 elderly Britons earn more than £5,000 annually, with 17,460 pensioners receiving even more generous payments exceeding £10,000.
The inherited Serps payments are part of the old state pension system, allowing surviving spouses and civil partners to receive additional income.
For many retirees, these inherited entitlements provide an enhancement to their regular state pension. The data comes from Royal London's analysis of Department for Work and Pensions (DWP) figures for the 2023/24 tax year.
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Surviving spouses could claim extra retirement income
GETTYIn total, more than two million pensioners (approximately 2,027,440) received payments from an inherited Serps scheme. The average annual inherited Serps payment stands at £3,377.
These additional payments could boost some pensioners' total state pension income to upwards of £20,000 per year. This follows changes to the pension system introduced in 2016.
The DWP data was taken from its quarterly statistical inquiry, with figures extrapolated from its sample and rounded to the nearest 10.
Surviving spouses and civil partners may be eligible to inherit part of their deceased partner's additional state pension.
Britons are looking to boost their state pensions GETTYThis inherited amount is paid on top of their own state pension when they reach state pension age. For the 2024/25 tax year, eligible individuals could inherit up to £11,356.28 annually (£218.39 per week).
For the previous tax year, the maximum amount was slightly lower at £204.68 per week. Understanding eligibility criteria is essential for those who may be entitled to these payments.
Sarah Pennells, consumer finance specialist at Royal London, said: "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," she added.
Pennells emphasised that "understanding the rules is key to boosting your retirement income".
She also noted: "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."
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GettyPennells advised those uncertain about their entitlements to take action.
"If you're in doubt about your inherited Serps entitlements, then you should contact the Pension Service to find out what you should be receiving," she said.
The significant financial boost these payments provide highlights the importance of checking eligibility.
With over half a million people receiving more than £5,000 annually, these inherited entitlements represent substantial additional income for many pensioners.
