19-year marriage not enough for spouse’s pension

A reader who lost her husband discovered that she would get only 17pc of his pension. By Jessica Beard

G‘If Bradley had known he might have taken out life cover or moved the pension’

etting finances in order after the death of a loved one is tough at the best of times. The loss of a husband or wife can turn your whole world upside down and, naturally, money may be far from your mind.

But Olivia Bannon, one reader from the West Midlands, got a nasty shock when she found out that she wouldn’t get half of her late husband’s pension as she had expected, but just 17pc of it.

Ms Bannon, who is 83 and asked for her name to be changed, lost Bradley, her husband of 19 years, to coronavirus in March.

She said: “Bradley fell and was told to go to hospital. He caught it there and died within eight days. I wasn’t allowed to see him and we couldn’t even have a funeral. It was a very grim time for me.”

Ms Bannon said she was horrified when, four months later, she was told she would not be receiving half of her husband’s £2,200-a-month pension, as expected, but just £378.

Normally, surviving spouses of members of “final salary”-style pension schemes are entitled to half of their late partner’s income for life.

Mr Bannon paid into his pension for the 40 years he worked as a civil servant. However, his wife is not entitled to 50pc as they married after he had already retired.

Under the civil service pension scheme rules, anyone married after they retire can only receive half of the pension built up after April 1978, when the rule was put in place.

Therefore, only the last 10 of 40 years have been counted towards Ms Bannon’s income.

She said: “I didn’t expect it. I can’t understand why the fact that we married after he was forced to take early retirement is such a problem when it was still a very long marriage.”

She said she no longer had enough income to cover her bills and living costs. Ms Bannon said she was concerned she may have to sell her home, which she had shared with Bradley for the 19 years they were married.

“I turn off the heating to keep costs down. I don’t think I can face clearing out the house. If Bradley had realised that the amount I would receive would be so little, he might have taken out life insurance or switched pension.”

There are rules protecting pensions from being transferred after “deathbed marriages”, where couples wed in the last few days or weeks of their lives.

However, Sir Steve Webb, a former pensions minister and now a partner at consultancy LCP, said it was hard to see why the rules applied in a case such as Ms Bannon’s.

“It doesn’t sound that they have tried to rig the system,” he said. “It is hard to see why you would write a rule that could leave this lady so far short of what she was expecting.”

Many of the rules governing pension schemes were written decades ago and can sometimes produce very unfair outcomes, Sir Steve added.

Ms Bannon, who has been distressed since hearing how low her income would drop, has written several letters to the responsible authorities and her local MP, pleading for change. But she has been told nothing can be done.

A spokesman for the Cabinet Office said: “Our thoughts remain with Ms Bannon following the loss of her husband. However, we are obliged to follow the rules of the pension scheme as they are set out in legislation, and that is what has happened in this case.”

The Government confirmed there were no immediate plans to review the rules.

Surviving spouses do not automatically get half of their partner’s pension when they die. The amount they are entitled to will depend on the type of pension, the age of the deceased and their beneficiaries.

It is important to contact the pension provider to find out how your specific scheme works, as there will be differences between employers.

For defined benefit pension savers, such as Ms Bannon’s husband, there are several rules governing how much you will receive. This will depend largely on whether the person was retired or not when they died. If they were still in fulltime work, then most schemes will pay out a tax- free lump sum that corresponds to multiple years of wages.

If they were already retired and receiving their retirement income, then reduced payments would continue to be paid out to the living spouse.

For the state pension, you may be entitled to extra payments after the death of a spouse depending on whether they qualified for the “old” state pension, paid out before April 2016. You must be over the state pension age to claim these payments and not have remarried or formed a new civil partnership.

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