Deferring State Pension

The new rules of deferring your pension

If you are retiring after April 6, 2016 and decide not to claim your state pension immediately, when you finally do the amount you receive will be increased.

The amount of the increase is 1% for each nine weeks you defer, therefore, a deferral for one year would enhance a pension by just under 5.8%. A full state pension of £159.55 would increase over the year by £9.22 a week to £168.77. The starting amount would be in excess of this amount due to the ‘triple lock’ annual increase of at least 2.5%.

In the past you could choose between the extra weekly pension and taking a lump sum. Under the new rules you are not permitted to take a lump sum.

Do I defer?

During the deferral period, one does not receive a state pension. If you defer for a year and give up £159.55 a week you will have lost a total of £8,296 in pension you did not draw.

Taking inflation into account you will have to live around 15 years to get tha