Latest news with #PensionService
Sky News
6 days ago
- Business
- Sky News
What happens to your pension when you die?
What happens to your pension savings when you die depends on several factors, including whether you've reached retirement age, the type of pension you have, your marital status and the beneficiaries you have nominated. Strap in, this is quite complicated... but here's what you need to know… What happens to your state pension? It depends on whether you get the old or new state pension. If you reached state pension age before 6 April 2016, you are on the old state pension. You may be able to inherit some of your spouse or civil partner's state pension when they die. If you don't have a full national insurance record, you could top it up with your partner's eligible years - increasing your basic state pension. You may also be able to inherit part (generally 50%) of your spouse or civil partner's additional state pension or graduated retirement benefit. Contact the Pension Service to check what you can claim. Children or cohabiting partners are not entitled to anything. If you are on the new state pension, so post 6 April 2016, you can't make a claim for their national insurance qualifying years. However, if your partner built up more than the full amount of state pension, the additional amount is a "protected payment", half of which can be passed to your wife or husband. Private pensions - defined benefit Defined benefit pensions are now generally only available from public sector or older workplace pension schemes. This type of pension pays a retirement income based on your salary, and how long you made contributions to your employer's pension scheme. If this is the pension you have, the money paid to your beneficiaries will be outlined in the scheme's rules but often a spouse will receive around 50% of the money. If your children are under 23 and in full-time education, or mentally or physically impaired, they may also be eligible to get a percentage of the pension you were getting (or were due to get, if you die before pension age). "It's really important a couple checks whether or not an individual (particularly the spouse) will actually qualify for the spouse's pension if the person dies," Penny Cogher, a partner at Irwin Mitchell LLP, said. "They could have a very nasty shock if they don't qualify because they weren't married at the right time. "Some schemes provide children's pensions but there is no requirement to provide this." Private pensions - defined contribution Money left over in your defined contribution pension can be paid to beneficiaries in a few ways: Your beneficiaries can withdraw all the money as a lump sum; They can set up a guaranteed income (an annuity); They can also set up a flexible retirement income, called "pension drawdown". If you've chosen the annuity route (which we explain more here), it depends on which type you bought - a joint life annuity can be passed to a second person, whereas a single life annuity dies with you, though some offer guaranteed periods for a set period of time. If you chose drawdown (explained here), or for that matter, are still working, any money left can be passed on to family or whoever you wish. In most cases, the trustees who are appointed by the scheme will pay those you have nominated in your "expression of wish" form but they are not obligated to do so. "If somebody doesn't have an expression of wish, then the trustees will decide who receives your pension benefits, which may not align with the pension holder's wishes," said Gorkem Barron, from Lubbock Fine Wealth Management. Will it be taxed? Pensions are not currently subject to inheritance tax. But last year, the government extended the range of pension benefits that will become subject to inheritance tax from April 2027. Almost all lump sum death benefits will be subject to inheritance tax rules, as will unused drawdown funds. But remember, the first £325,000 of an individual's estate is exempt. And from 6 April this year, those seeking to transfer cash to pension schemes in the European Economic Area or Gibraltar will no longer be exempt from overseas transfer charges, as the government seeks to stop individuals reducing their tax liabilities by moving their pensions to another jurisdiction. Inherited pensions can also be subject to income tax - though the rules on this are a little convoluted. If you die before the age of 75, and are leaving money from a defined contribution pension pot or in drawdown, there's no income tax unless the lump sum and death benefit allowance has been exceeded. The lump sum allowance is £1,073,100 - anything over that is taxed at the beneficiary's marginal rates of income tax. If you die at 75 or over, anything you pass will be subject to income tax at the beneficiary's highest marginal income tax rate on any money they withdraw. With defined benefit pensions that leave a regular income to beneficiaries, there's usually no income tax - age doesn't come into play.
Daily Mirror
15-06-2025
- Business
- Daily Mirror
Full list of pensioners due up to £106 a week from DWP
You could be eligible for some additional cash to pay for daily living costs. Pensioners with a certain income level could be in line for up to £106 a week from the Department of Work and Pensions (DWP) to help with everyday expenses. The DWP's latest figures show that the State Pension currently provides a steady financial income for 13 million older individuals across the UK. Eligibility for this payment requires reaching the Government's retirement age of 66 for both men and women, as well as having contributed to National Insurance (NI) for a minimum of 10 years. However, as highlighted by the Daily Record, those over 80 who either have no Basic State Pension or receive less than £105.70 per week could be entitled to extra funds to aid with daily living costs. The "over 80 pension" offers £105.70 weekly to seniors not receiving any Basic State Pension, or it supplements their existing pension up to this amount. Additionally, low-income individuals over 80 may be eligible for Pension Credit, potentially gaining over £4,300 in additional financial support throughout the 2025/26 fiscal year. Claiming the over 80 pension To claim the over 80 pension, it's important to understand that eligibility ceases if you reached State Pension age on or after April 6 2016; instead, you would be eligible for the New State Pension. The guidance on indicates that you can claim the over 80 pension if all of the following conditions are met: You are 80 or over You do not get Basic State Pension or your Basic State Pension is less than £105.70 a week You were resident in the UK for at least 10 years out of 20 (this does not have to be 10 years in a row) - this 20-year period must include the day before you turned 80 or any day after You were 'ordinarily resident' in the UK, the Isle of Man or Gibraltar on your 80th birthday or the date you made the claim for this pension, if later. Also, on your 80th birthday or when you claimed the pension, you needed to be "ordinarily resident" in the UK, the Isle of Man or Gibraltar. For UK nationals residing in or moving to an EEA country or Switzerland, consult the website for detailed pension info. Your eligibility for the over 80 pension is not based on National Insurance contributions. To make a claim, you can get a form from either your local Jobcentre Plus or the Pension Service. The earliest you can claim is three months before your 80th birthday. You can request a claim form from the Pension Service by ringing 0800 731 7898. Pension Credit This tax-free benefit ensures single pensioners receive a minimum of £227.10 per week and couples get £346.60. You must have reached the Pension Credit qualifying age, equivalent to the State Pension age, and live in Great Britain to qualify. The fastest way to check if you can claim Pension Credit is online. Elderly individuals, or their friends and family, can quickly check their eligibility and get an estimate of what they may receive by using the online Pension Credit calculator on Alternatively, pensioners can directly ring the Pension Credit helpline to make a claim on 0800 99 1234 - lines are open from 8am to 6pm, Monday to Friday.
Daily Record
10-06-2025
- Business
- Daily Record
People on Basic State Pension payments urged to check for historical DWP errors
Historical State Pension errors mostly affect women who can ask the DWP to recalculate their payments. Pension Credit – Could you or someone you know be eligible? The charity Independent Age has launched a handy State Pension factsheet providing essential information for older people already claiming the contributory benefit worth up to £230.25 each week, or those nearing the official age of retirement. The helpful guide covers everything you need to know about the payments, including the difference between the New and Basic, when to claim it, deferring, how the amount is calculated and when you might need to pay tax. However, it also takes a look at historical underpayments and urges those on the Basic State Pension who may have been due National Insurance (NI) 'top-ups' to contact the Pension Service to ask them to recalculate their State Pension if they think it might be wrong. A survey carried out by Independent Age found that 41 per cent of people aged 50 and over were anxious about their finances after retirement. Almost half said that they didn't have much knowledge of what financial options, including the State Pension, would be available to them once they retired. Independent Age guidance states: 'If you qualify for basic State Pension and can claim State Pension 'top-ups', these are usually calculated for you. But some people - particularly women who paid reduced NI rates - may have had their State Pension miscalculated and underpaid. 'If you think this affects you, contact the Pension Service to ask them to recalculate your State Pension. You can do this whether you're claiming or delaying your State Pension. You can also contact our helpline to arrange to speak to an adviser.' The full State Pension help guide can be found on the Independent Age website here. You can also call them directly on 0800 319 6789. State Pension historical errors The Department for Work and Pensions (DWP) has said that between January 8, 2024 and March 31, 2025, a joint State Pensions corrections exercise with HM Revenue and Customs (HMRC), identified 12,379 State Pension underpayments to women whose National Insurance (NI) records are incorrect. In 2022, the DWP became aware of a number of State Pension cases where it appeared that historic periods of Home Responsibilities Protection (HRP) were missing, leading to inaccurate State Pension payments. So far, around £104 million in arrears have been paid out, with an average payment of £8,377. Retirement expert Helen Morrissey is urging older people to complete the online form or contact the Pension Service if they think they have been affected after new research from the DWP shows the main reasons why those who have received a letter from HMRC asking them to check their State Pension as it could be wrong - have failed to do so. HMRC has sent out more than 370,000 letters - mostly to women - urging them to check their State Pension payments as they may be lower than they are entitled to. However, the DWP research indicates that the majority of people contacted by letter did not go on to apply for HRP. Barriers included: Not understanding the letter Thinking the communication was a scam Reliance on digital methods to put in a claim HRP was a scheme designed to help protect parents' and carers' entitlement to the State Pension and was replaced by NI credits from April 6, 2010. HMRC is using NI records to identify as many people as possible who might have been entitled to HRP between 1978 and 2010 and have no HRP on their NI record. After May 2000, it became mandatory to include a NI number on claims so people claiming after this point will not have been affected. How to use the online HRP tool You may still be able to apply for HRP, for full tax years (6 April to 5 April) between 1978 and 2010, if any of the following were true: you were claiming Child Benefit for a child under 16 you were caring for a child with your partner who claimed Child Benefit instead of you you were getting Income Support because you were caring for someone who was sick or disabled you were caring for a sick or disabled person who was claiming certain benefits You can also apply if, for a full tax year between 2003 and 2010, you were either: a foster carer caring for a friend or family member's child ('kinship carer') in Scotland Who qualified automatically for HRP The guidance on explains that most people got HRP automatically if they were: getting Child Benefit in their name for a child under the age of 16 and they had given the Child Benefit Office their National Insurance number getting Income Support and they did not need to register for work because they were caring for someone who was sick or disabled If your partner claimed Child Benefit instead of you If you reached State Pension age before April 6, 2008, you cannot transfer HRP. However, you may be able to transfer HRP from a partner you lived with if they claimed Child Benefit while you both cared for a child under 16 and they do not need the HRP. They can transfer the HRP to you for any 'qualifying years' they have on their National Insurance record between April 1978 and April 2010. This will be converted into National Insurance credits. Married women or widows You cannot get HRP for any complete tax year if you were a married woman or a widow and: you had chosen to pay reduced rate Class 1 National Insurance contributions as an employee (commonly known as the small stamp) you had chosen not to pay Class 2 National Insurance contributions when self-employed If you were caring for a sick or disabled person You can only claim HRP for the years you spent caring for someone with a long-term illness or disability between April 6, 1978 and April 5, 2002. You must have spent at least 35 hours a week caring for them and they must have been getting one of the following benefits: Attendance Allowance Disability Living Allowance at the middle or highest rate for personal care Constant Attendance Allowance The benefit must have been paid for 48 weeks of each tax year on or after April 6, 1988 or every week of each tax year before April 6, 1988. You can still apply if you are over State Pension age. You will not usually be paid any increase in State Pension that may have been due for previous years. If you were getting Carer's Allowance You do not need to apply for HRP if you were getting Carer's Allowance. You'll automatically get National Insurance credits and would not usually have needed HRP. If you were a foster carer or caring for a friend or family member's child You have to apply for HRP if, for a full tax year between 2003 and 2010, you were either: a foster carer caring for a friend or family member's child ('kinship carer') in Scotland All of the following must also be true: you were not getting Child Benefit you were not in paid work you did not earn enough in a tax year for it to count towards the State Pension If you reached State Pension age on or after 6 April 2010 Any HRP you had for full tax years before April 6, 2010 was automatically converted into National Insurance credits, if you needed them, up to a maximum of 22 qualifying years. A full overview of HRP can be found on here.
BBC News
19-05-2025
- General
- BBC News
State Pension Underpayments
Call the Pension ServiceTelephone: 0800 731 0469Textphone: 0800 731 0464Relay UK, external (if you cannot hear or speak on the phone): 18001 then 0800 731 0469British Sign Language (BSL) video relay service, external if you're on a computer - find out how to use the service on mobile or tablet, externalWelsh language: 0800 731 0453Welsh language textphone: 0800 731 0456Monday to Friday, 8am to 6pm (except public holidays)Find out about call charges, externalFor more information on the Pension Service check the government website here, external.
Daily Record
16-05-2025
- Business
- Daily Record
People on benefits need to report these changes to DWP to avoid overpayment and £50 penalty
The latest figures from the DWP show there are nearly 24 million people claiming at least one benefit. The Department for Work and Pensions (DWP) now pays benefits to around 23.7 million people across the UK. However, many of those claimants may be unaware that they need to report changes in their circumstances to ensure they keep getting the right amount of financial support. Failing to notify the relevant DWP department 'straight away' could result in a claim being paused, stopped or reduced. Guidance on states: 'If you do not report a change or a mistake, you might be paid too much. If you are, you might have to pay some of the money back. You might also have to pay a £50 penalty.' It also warns: 'If you deliberately do not report changes, you're committing benefit fraud.' Changes you need to report According to the official guidance, changes to be reported can include: changing your name or gender finding or finishing a job, or working different hours your income going up or down starting or stopping education, training or an apprenticeship moving house people moving into or out of the place you live (for example your partner, a child or lodger) the death of your partner or someone you live with having a baby starting or stopping caring for someone getting married or divorced starting or ending a civil partnership planning to go abroad for any length of time going into hospital, a care home or sheltered accommodation any changes to your medical condition or disability changing your doctor changes to your pension, savings, investments or property changes to other money you get (for example student loans or grants, sick pay or money you get from a charity) changes to the benefits you or anyone else in your house gets you or your partner getting back-pay (sometimes called 'arrears') for salary or earnings you're owed changes to your immigration status, if you're not a British citizen It adds: 'If you claim Child Benefit you also need to report changes to your child's circumstances.' Reporting a death If you need to report the death of someone who has been receiving the State Pension or benefits, you can use the 'Tell Us Once' service - find out more here. How to report a change Typically, you should contact the relevant department responsible for administering and delivering your benefit. It's also important to remember that if you get more than one benefit, you need to tell each department separately about the change. Universal Credit - Report changes using your Universal Credit online account if you have one or contact the Universal Credit helpline Pension Credit - Call the Pension Service helpline or report changes by post Attendance Allowance - Call the Attendance Allowance helpline Disability benefits - Call the Disability Service Centre to report changes if you get Disability Living Allowance (DLA), or Personal Independence Payment (PIP) Carer's Allowance - Report a change online or call the Carer's Allowance Unit Housing Benefit - Report a change to your local council Child Benefit - Report changes using the Child Benefit online service or call or write to the Child Benefit Office All other benefits - Report changes by calling Jobcentre Plus, you will need to have your National Insurance number when you call Full details with direct links to each department can be found on here. Earlier this week, DWP Transformation Minister Andrew Western, branded data revealing more than £9 billion in benefit overpayments due to fraud and error as 'staggering'. The latest official statistics said the total rate of benefit expenditure overpaid in the year to the end of March was £9.5 billion - with fraud accounting for most of that sum. However, the new figures from the DWP also show that over the same period, an estimated £1.2 billion was underpaid in benefits. Fraud accounted for £6.5 billion of the total overpayments figure in the year to March, down from £7.3 billion a year earlier. Claimant error was up year-on-year, accounting for £1.9 billion in the year to March, from £1.6 billion the previous year, while overpayments because of official error also rose to £1 billion from £0.8 billion the previous year. DWP said people under-declaring their earnings remained the main cause of fraud overpayments, followed by benefits claimants failing to declare living with a partner, and thirdly people under-declaring their financial assets or capital. The Department said it was able to recover some £1.1 billion of overpayments in the past year - £0.4 billion in Housing Benefit and the same amount in Universal Credit. In a written statement published alongside the figures on Thursday, Mr Western said: 'This Government made a manifesto commitment that it will safeguard taxpayers' money and not tolerate fraud or waste anywhere in public services. 'With welfare benefits paid to around 24 million people, the welfare system is a deliberate target for both organised crime groups and opportunistic individuals and it is vital that the Government continues to robustly tackle fraud to ensure support goes to those who need it most. 'We are taking further steps to minimise error, ensuring the right people are paid the right amount at the right time.'
