State pension deferral

It is not necessary to claim the state pension as soon as the state pension age is reached. 

By not making a claim, deferring, for a period of at least nine weeks the pension received will be increased by 1% for each nine weeks deferred which is just under 5.8% a week.

Example

Let's look at someone who is entitled to the new state pension (£175.20 a week).

This means your state pension will be £9,110.40 a year.

By deferring for a year, you will receive an additional £528 (just under 5.8% of £9,110.40).

The same pension would increase by £10.16 from £175.20 a week to £185.36 a week if it were deferred for one year.

This assumes there is no annual increase in the state pension, so the amount you get could be larger.

After you claim, the extra amount you receive because of the deferral will usually increase each year.

While the pension is being deferred by £175.20 a week, the loss for the year will be £9,110.40.

So it will be necessary to live for a good few years before the loss of the pension income is recouped from the additional amounts.

Reasons why some people defer

They already have adequate retirement income and are happy for the entitlement to grow.

There are tax-planning reasons, for example, a capital gain may be envisaged in the first year the pension is due to be received or their employment income was substantial during that tax year.

What is the state pension entitlement?

A state pension forecast can be requested by visiting www.thepensionservice.gov.uk, or by calling the future pension centre helpline on 0800 731 0175 (textphone 0800 731 0176).

Deferral contact details

Call: 0800 731 7898

These calls are free from BT landlines. Calls from mobile phones may be charged at premium rates. A request may be made for the operator to call back.