Some state pensioners may be able to increase their annual pension payments by up to £916 by delaying their claim for at least a year. This option, known as pension deferral, allows retirees to receive higher weekly payments if they postpone drawing their pension beyond State Pension age.
Currently, the State Pension age in the UK is 66 for both men and women, with eligible individuals receiving an invitation letter around four months before their birthday. While most people choose to start their pension as soon as they become eligible, those who defer their claim can see their payments increase significantly over time.
How Pension Deferral Works
For pensioners who reached State Pension age before 6 April 2016, their pension increases for every five weeks they defer. This translates to a 1% increase for every five weeks, or 10.4% for every full year of deferral.
For example, those entitled to the full basic State Pension, which is currently £169.50 per week, could receive an additional £17.62 per week if they defer for 52 weeks. Over the course of a year, this would amount to £916.24 in extra income.
Even if someone has already started claiming their State Pension, they still have the option to pause payments and benefit from the deferral increase later on. This flexibility means that those who do not immediately need their pension income could gain financially in the long run.
Who Qualifies for Pension Deferral?
The basic State Pension applies to men born before 6 April 1951 and women born before 6 April 1953. Eligibility for the full amount depends on the number of qualifying years of National Insurance (NI) contributions.
- Men born between 1945 and 1951 usually need 30 qualifying years to receive the full pension, or 44 years if born before 1945.
- Women born between 1950 and 1953 also need 30 qualifying years, while those born before 1950 typically require 39 years.
Those who do not meet the required National Insurance contributions may receive a lower State Pension amount, but deferring their claim could still increase their payments over time.
State Pension Increase in 2025
The State Pension is set to rise by 4.1% in April 2025, following the government’s commitment to the Triple Lock policy. This means that the full basic State Pension will increase from £169.50 to £176.45 per week, giving retirees an additional £360 annually if they receive the maximum amount.
For those who choose to defer their State Pension, this increase could further boost their final pension payments, as the uplift applies to both the basic and new State Pension schemes.
