Pension savers are reaping the benefits from the inherited Serps initiative from the Department for Work and Pensions (DWP) and HMRC.State pensioners being handed £5,000 bonuses thanks to HMRC 'initiative'State pensioners being handed £5,000 bonuses thanks to HMRC ‘initiative’

State pensioners are being urged to check an inheritance rule to bolster pension savings by £5,000. Pension savers are reaping the benefits from the inherited Serps initiative from the Department for Work and Pensions (DWP) and HMRC.

Royal London has revealed that in the 2023/24 tax year, approximately 2,027,440 pensioners benefited from payments from an inherited state earnings-related pension scheme (Serps).

The data shows that over half a million pensioners received more than £5,000 annually from these inherited payments. Royal London’s consumer finance specialist Sarah Pennells said: “This data shows how much of a difference inheriting a Serps pension from your husband, wife or civil partner can make.

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“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.

“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.”

The data released by the Department for Work and Pensions ( DWP ) relates to the old State Pension which was available to anyone who reached State Pension age before April 6, 2016. The old State Pension contained two components: the main, basic amount you could receive by paying or being credited with enough National Insurance and then an earnings-related ‘additional’ pension, originally SERPS and later replaced by the State Second Pension. Both these schemes allowed employees to build up an entitlement to extra State Pension income.

They were abolished under the new State Pension system, introduced in April 2016. The amount someone can inherit is calculated according to the date a husband, wife or civil partner died and their age at the time of death.

According to the 2024 figures obtained by Royal London, the average inherited SERPS payment for 2023/24 stood at £3,377 annually.