Widow Pension: everything you’re entitled to in 2022

Can a widow earn more pension? How much? What are the conditions? Will I need to pay tax on my payments? If your late partner paid money in a pension pot, you may be eligible for extra amounts of pension. Your Benefits will tell you everything that you need to know about the widow pension.

What pension is a widow entitled to?

If you are a widow, there are a variety of pension you may be entitled to. This is especially depending on what pension your spouse or civil partner was earning at the time. A widow can often earn extra amounts of pension. This is especially true if your husband, wife or civil partner died while earning a certain type of pension.

Can a widow earn extra pension payments?

If you experienced the death of a wife, husband or civil partner, you may be eligible to receive extra amounts of pension payments or National Insurance contributions.

The widow pension may be from a defined benefit pot. In this case, the only person it can most likely be received by is a someone that was dependent on the late individual. More specifically, this can be a wife, husband, civil partner or child under the age of 23 years old.

What if my partner earned State Pension?

You may be able to claim extra State Pension. For this to be true, you must be over State Pension age. You may then be eligible for additional amounts from your civil partner, wife or husband’s State Pension. 

State Pension age widow pension

You may get the State Pension appropriate to what your civil partner, wife or husband’s National Insurance contributions were at the time of applying for your pension. 

You may have reached State Pension age on or after 6 April 2016. In this case, you will likely be eligible for the ‘new State Pension’. Additionally, on top of this, you may receive an additional amount. This is likely if your partner died before 6 April 2016, but reached State Pension age on or after that same date.

Can a widow earn more from a private pension?

There may be extra payments you are entitled to. This is depending on what pension your wife, husband or civil partner was getting from their workplace. Additionally, you may have to pay taxes on those payments. This is in the case that they are not already paid by your pension provider.

You may be a widow and want to earn a pension. If your wife, husband or civil partner served in the Armed Forces at the time of their death, you may be eligible. However, you are still eligible if they did not serve, but the reason for their death was a war.

How may I claim my pension or extra pension amounts?

The claiming process and office you have to contact depends on the type of pension that is in play. For example, if you need to claim a private pension, you may have to contact the former workplace of your late loved one.
If you wish to claim State Pension, for example, you may then contact the Pension Service.

You may also claim benefits like Child Benefit. You may even claim the higher rate. This is not the case, however, if you are a widowed parent. Then, you could claim a personal pension.

When will I need to pay taxes on my inherited widow pension?

You may be a widow getting pension from your late partner’s pension pot. If this is the case, there is a chance that you may have to pay taxes on it. Note that the rules for inheritance are not the same for State Pension.

The late individual must most likely have nominated you in order for you to earn extra pension as a widow. If it is from a defined benefit pot, it will, in most cases, only be paid to someone dependent on the late person. This includes a wife, husband, civil partner or child under 23-year-old.

What if I want to give a pension pot I inherited to someone else?

You may have inherited a pension that is in a defined contribution pot. Then you are able to name someone to be a recipient to that money. They can receive any amounts that you chose not to use in your lifetime.

How do I know when to pay tax on the pension I receive as a widow?

There are different factors that dictate whether you will have to pay taxes on the pension you receive as a widow. They are as follows

• Payment type that you receive;
• Pension pot type;
• How old the owner of the pension pot was at the time of their death.

What tax do I need to pay?

The owner of the pension pot may have been younger than 75 years old at the time of their death. If this is the case, you will likely not have to pay any tax on their pension pot payments. For this to be the case, at least one of the following must be true for you or your late partner:

• You received payments for over 2 years after the death of the late individual was notified to the pension provider;
• The total amount of pension savings that they had exceeds £1,073,100 (this is known as the ‘lifetime allowance‘);
• you receive payments from the pot and buy annuity, and the late individual passed away prior to 3 December 2014.

What if I received payments for more than 2 years after the death was notified to the pension provider?

You may be a widow or other, receiving a pension from a pot whose owner was younger than 75 years old at the time of his death. It may also be over 2 years after the pension provider was notified of the death.

Then, you will have to pay tax on the payments you receive if you also get any of the following:

• A drawdown fund or annuity coming from an ‘untouched pot‘ (what this means is that no money was taken out of the pot from the late individual);
• The majority of kinds of lump sums coming from defined benefit or defined contribution pots.

Income Tax will be deducted from the payments you receive. This is regardless of which circumstance applies to you. 

What if the individual had pension savings over £1,073,100?

The late individual may have had pension savings over £1,073,100. In this case, you will likely have to pay a lifetime allowance tax charge. Reductions done to the lifetime allowance may not apply to the pension pot.

The lifetime allowance tax charge you will have to pay is as follows:

• 55% if you receive any type of lump sum;
• 25% if you receive any other kind of payments (this may include money or annuities from a drawdown fund and pensions).

Someone else may receive money from the same pension pot as you. In this case, the amount that you receive is very likely to change.

You will be sent a letter about the lifetime allowance tax charge. The office that will send it to you is Her Majesty’s Revenue and Customs (HMRC). They will do so after they learn about the payments. This will likely be done by the person that is taking care of the estate of the late individual.

How is lifetime allowance calculated?

You can ask your pension provider the amount of lifetime allowance you used up to this point. You may be earning more than a single pension scheme. In this case, everything used in every single pension that you are paid needs to be added up. What is counted towards your lifetime allowance is dependent on the kind of pension pot that you receive payments from.

You may receive money from a defined contribution pension pot. This is likely for most workplace, stakeholder and personal schemes.
In this case, the money that counts as your lifetime allowance are amounts that you receive and keep from pension pots.

You may receive money from a defined benefit pension pot. This may be the case if you receive certain types of workplace schemes. Usually, your lifetime allowance amount will be 20 time the amount of pension that you receive during the first year. Added to that is your lump sum.

What if I receive an annuity?

You may be a widow and receive an annuity from the pension pot. The death may have occurred prior to 3 December 2014. Then, you will have Income Tax deducted from your payments first by your pension provider.

Finally, if you receive a lump sum, you will usually not have to pay Inheritance Tax. This is because the payment is typically considered ‘discretionary‘. This signifies that whether it needs to be paid or not is decided by your pension provider.

What if I paid too much tax?

You may believe you have paid too much tax. If this is the case, you have a recourse. You may complete a Self Assessment tax return every year. The, once your return has been sent, you should receive a refund.

You may not have received a payment. The form you would need to send out depends on if you:

• Emptied the pension pot, and have no other additional remaining income for the remainder of the tax year;
• Emptied the pension pot and have no other additional income that is taxable;
• Have not emptied the pension pot, and do not receive regular payments.

Your payments may have come from a trust. In this case, there is a different claiming process.