Retirees who delay claiming the new State Pension can receive higher weekly payments for the rest of their lives. The increase is linked to the length of the deferral period and applies to people who reached State Pension age after April 5, 2016.
The UK Department for Work and Pensions (DWP) has confirmed that people who defer their new State Pension can receive additional payments on top of their regular entitlement. The arrangement allows eligible pensioners to increase future State Pension income by postponing their claim.
According to the DWP, the increase is calculated based on the length of the deferral period. The policy applies to individuals who reach State Pension age after April 5, 2016, and in some cases people may also be able to receive a lump sum instead of, or alongside, higher regular payments.
How the State Pension Deferral Increase Works
The DWP states that people who defer claiming the new State Pension receive an additional 1% on their pension amount for every nine weeks they delay. That increase is then added to regular State Pension payments for the rest of the recipient’s life. For the 2026/27 tax year, the DWP says this would amount to an extra £2.41 per week for someone entitled to the full new State Pension after a nine-week deferral period.
A longer delay produces a larger increase. According to the DWP, deferring for a full year results in an increase of just under 5.8%. For a person receiving the full new State Pension, that equates to an additional £13.94 per week.
The department says this would bring total weekly State Pension payments to £255.24 during the 2026/27 tax year. On an annual basis, that increase is worth £724.88, a figure widely reported as approximately £728 per year. The DWP also notes that some people may qualify for a lump-sum payment option rather than, or in addition to, higher ongoing pension payments, depending on their circumstances.
Martin Lewis Highlights Health and Tax Considerations
Financial commentator Martin Lewis discussed the implications of State Pension deferral, focusing on how the decision may affect different individuals.
According to Lewis, the outcome depends largely on life expectancy. He said that people who live longer than average life expectancy may gain financially from deferring, while those who live for a shorter period may receive less overall than they would have by claiming immediately.
“Defer your state pension, and the maths works out that if you live longer than typical life expectancy, you’ll gain; if you live less, you’ll lose,” Lewis said. He added that for someone living a typical lifespan, the result is likely to be broadly neutral.
Lewis also pointed to health as a factor when deciding whether to defer. He said the option may be less attractive for people in poor health, while those with good health and a family history of longevity could benefit more from delaying their claim.
Tax considerations may also influence the decision. According to Lewis, deferral can be worthwhile for people who are currently earning or receiving a relatively high income but expect to pay tax at a lower rate later.
Money Saving Expert highlighted another aspect of the calculation. According to the website, a one-year deferral could generate an additional £728 a year in State Pension income for life, but the individual would also forgo £12,547 in State Pension payments that could otherwise have been claimed during that first year. The decision therefore involves balancing the value of higher future payments against income given up during the deferral period.
