Pensions and Bereavement

If you die, your State Pension benefits are not transferable to your surviving partner, or dependents. However, your National Insurance record may be taken into account when calculating your surviving partner’s State Pension, depending on the individual circumstances. Some private pension savings schemes entitle your surviving partner to a percentage of your pension benefits in the event of your death. Some scheme providers will only recognise married couples or civil partners in this case, and will not pay this reduced benefit to a common-law spouse. Other pension savings schemes are set up so that your pension dies with you, and in the event of your death your partner would be entitled to none of your residual pension savings.

Whilst these 'in case of bereavement' clauses may not be your first consideration when choosing a pension savings scheme, you should at least be aware of exactly how your pension scheme functions in case your situation changes in the future and you wish to make provisions for a new spouse or dependent. If you are the main breadwinner for your household, consider joining a pension scheme which will provide for your dependents in the event of your death.

Similarly, a wife’s State Pension is often calculated according to the National Insurance contributions of her husband. If the husband dies and the wife is making no National Insurance contributions of her own, this wife’s pension will thus be potentially in jeopardy. In some cases you would still be entitled to receive a pension based on your late husband’s contributions, but not in all cases. This system can also work the other way round, that is, a surviving husband may be able to claim based on his late wife’s record, and naturally the surviving partner of a civil partnership would also be able to claim based on their late partner’s record. Nevertheless there is no guarantee that you will be entitled to a State Pension unless you have contributed sufficient National Insurance payments yourself over your working life.

If you have dependents it is prudent to attempt to ensure that they would be provided for in the event of your death. Similarly, if you are a dependent, it is essential that you consider how you would be affected financially if your provider were no longer there. Consider also how your retirement income would be affected by this bereavement if you calculated this income based on your incoming cash as a retired couple or a family: would you still be able to support the same retirement outgoings without your partner?

For more detailed information on this topic, see State Pensions and Family, Non-State Pensions and Family and Pension Protection and Family.