We are divorced but not divorced, so will the death of my estranged husband increase or decrease my pension and benefits?
Steve Webb for this is money
I am separated from my husband, but not divorced. I am 78 years old and I claim a guaranteed credit to top up my pension. I can therefore claim housing benefit.
My husband is dead now. How does this affect my pension and my guaranteed creditworthiness? Will I be worse off?
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Pension finances: how does inheriting a state pension affect pension credit, rent subsidy and other payments? (Stock image)
Steve Webb replies: Thank you for your question. After the death of your husband, it is quite likely that your state pension will be affected and that this in turn can have a knock-on effect on the pension credit and other benefits you receive.
State pension: Basic and SERPS
Starting with your AOW, there are two ways in which the amount received can be affected.
The first is that if you do not currently receive a full basic pension, perhaps because of an incomplete overview of national insurance premiums during your working life, this part of your pension could be increased to the full rate, currently £ 125.95 per week, based on the contributions of your deceased spouse.
How many SERPS can you inherit from a partner?
Steve explained how this was worked out in a previous column here.
The second impact could be on the amount of the government-related pension or & # 39; SERPS & # 39; that you receive.
Since you were still married at the time your husband died, you would have the right to inherit at least half of every SERPS pension that he received and possibly even more dependent on his date of birth.
Both calculations must be carried out automatically by the ministry for work and pensions, although it may take weeks or even months before this happens.
Private pensions: check whether you are still the beneficiary
Before proceeding to the domino effects on your pension, I must state that if your deceased spouse was a member of an occupational pension scheme, you may consider that you are entitled to a widow's pension from such a scheme.
Assuming that there is no one else with a subsequent claim to receiving a pension if & # 39; dependent & # 39 ;, then you can still be named as the beneficiary of his occupational pension, even though you were divorced.
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Pension credit: reduced if your AOW pension rises
With regard to your pension credit, in simple terms, if your state pension goes up, your pension credit will fall.
Since you are on the & # 39; guarantee credit & # 39; of the pension credit, I would expect a reduction of the pound per pound.
It can be more complicated if you receive a widow's pension from a company plan, because a possible reduction of your guarantee credit can be partially compensated by an increase in the savings credit.
If you only receive a small amount of pension, there is a risk that an increase in your AOW benefit could mean that you are no longer entitled to a pension.
This would make life more complicated for you because the receipt of even a few cents of the guarantee credit acts as a 'passport & # 39; for other benefits, such as full rent subsidy.
Housing and other benefits: how they can be affected
If you no longer receive a guarantee credit, you should contact your local government and file a claim for rent subsidy.
How does pension credit work?
More than £ 3 billion per year is not claimed. Read more here.
You would probably notice that rent subsidy still covers most of your rent, but not necessarily everything.
Receipt of pension credit (and sometimes specifically the guarantee credit element) is also a passport for certain other benefits.
These include payments for cold weather (paid when the temperature in the winter is seven days lower than the freezing point), assistance with certain NHS costs, assistance with energy bills, and so on.
Unfortunately, these schemes often work on an all-or-nothing basis and if you stop receiving a pension, you may no longer qualify, even if your income is only a few pounds more.
More than 65? 10 pots of cash and freebies that you could be entitled to
How do you get help with travel, heating, eye tests, TV licenses, hospital travel costs and more? Read our guide on how to claim here.
ASK STEVE WEBB A PENSION DEMAND
Former Pension Secretary Steve Webb is This Is Money & # 39; s Agony Uncle.
He is ready to answer your questions, whether you are saving, are busy stopping your work, or juggling your finances.
Since he retired from the Ministry of Work and Pensions after the May 2015 election, Steve is working as policy director at the Royal London pension agency.
If you want to ask Steve a question about pensions, send him an e-mail at email@example.com.
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Steve receives many questions about state pension and COPE forecasts – the contracted pension equivalent. If you write this topic to Steve, he responds to a typical question from the reader here. It contains links to Steve's various previous columns on state pension forecasts and outsourcing, which may be useful.
If you have a question about the relocation of a state pension, Steve has written a guide that you can find here.
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