The government has announced changes to bereavement support payments.
The Department for Work & Pensions says from 6 April 2017 a new bereavement support payment will replace the three-tier system of bereavement payment, bereavement allowance and widowed parent’s allowance.
The new benefit is available to people of any age up to state pension age, and widens support from 12 to 18 months.
It consists of an initial lump sum of £3,500 and 18 monthly instalments payable to the surviving spouse or civil partner.
Aegon has welcomed changes to the payment. Stephen Crosbie, protection director at Aegon said: “We welcome the changes to the Bereavement Support Payment. The more support people can get following the loss of a loved one the better. By making this more accessible, people can focus on grieving and dealing with that loss without having to worry about the immediate financial strain it can cause.
“However, people should be looking to make arrangements beyond the Bereavement Support Payment, as it is unlikely to provide the financial support needed to maintain their current standard of living should they lose the income from the main breadwinner in the household.
“Purchasing life insurance can provide a financial lifeline for people and their families, and in the event of the unexpected happening can take the pressure off household breadwinners who feel it’s solely their responsibility to make sure that their family has enough income in these devastating circumstances.
“A simple discussion with a financial adviser to identify their protection needs could give people the peace of mind and confidence that should the unexpected happen to them, they are prepared.”
However, Steve Webb, Royal London’s director of policy, was less effusive. He said: “We are pleased that the government has listened to some of the concerns around bereavement support and updated it. However, it’s disappointing that they have failed to address the great unfairness around couples who live together and pay the same national insurance contributions as married couples but are not able to benefit from the Bereavement Payment Support.
“Our research shows that bereaved families face a penalty of around £82m per year simply because the system discriminates against those who are not married. This cannot be justified, especially where children are involved.”