Can you defer your State Pension?

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The State Pension is a Government benefit paid regularly to people who have reached State Pension age from April 6, 2016, onwards. Most people can claim the State Pension, but not everyone is entitled to get the same amount. How much you will get depends entirely on your National Insurance record.

Can you defer your State Pension?

In short, yes, you are able to defer or delay when you receive your State Pension.

You will not receive the retirement payout automatically – you have to actively claim it.

You should get a letter no later than two months before you reach State Pension age telling you what to do and how to claim.

At this point in the process, you can either claim the pension or delay or defer claiming it.

If you want to delay, you don’t have to do anything.

Your pension will automatically be deferred until you are ready to make the claim.

Deferring State Pension could actually be a good thing as you could increase your monthly payments by the time you decide to take the money.

However, there’s a downside to this too as any extra payments you receive could be taxed.

Your State Pension will increase every week you defer as long as you defer for a period of at least nine weeks.

The Pension goes up by the equivalent of one percent for every nine weeks you delay the payment.

This works out at just under 5.8 percent every 52 weeks, or every year.

The extra amount will be paid alongside your regular State Pension payment and you’ll see the cost reflected back to you in those.

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For example:

You get £175.20 per week (the full amount of new State Pension).

If you defer for 52 weeks, or one year, you will receive an extra £10.16 per week. This equals to just under 5.8 percent of the full amount, £175.20.

This example from the Gov website assumes there is no annual increase in the State Pension.

If the annual increase goes ahead, the amount you get will increase.

If you reached State Pension age before April 6, 2016, you can usually take your deferred extra amount as higher weekly State Pension payments or a one-off lump sum.

When you claim your deferred state pension, you will receive a letter asking how you want to take the extra money.

From the date of receiving the letter, you will have three months to make a decision and respond.

In this case, your State Pension payments will increase every week you defer as long as you delay for a minimum of five weeks.

The Pension will increase by the equivalent of one percent for every five weeks you defer, which works out at 10.4 percent for every 52 weeks.

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