Thousands of state pensioners<\/strong> could boost their retirement income<\/strong> by \u00a3666 per year<\/strong> by using a little-known rule<\/strong> that allows them to defer their state pension<\/strong>. While the idea of delaying retirement payments<\/strong> may not sound appealing at first, the financial benefits could make it a worthwhile option<\/strong> for some.<\/p>\n\n\n\n
By deferring their state pension payments<\/strong> for just one year<\/strong>, eligible pensioners can increase their weekly pension amount<\/strong>, leading to hundreds of pounds more each year<\/strong>. With the cost of living remaining high, this strategy could provide valuable extra income<\/strong> for those who can afford to wait before claiming their pension.<\/p>\n\n\n\n
The option to defer state pension <\/a>payments applies to individuals who reach <\/strong>state pension age<\/strong> <\/a>but choose not to claim immediately<\/strong>. This includes:<\/p>\n\n\n\n
Currently, the state pension age<\/strong> is 66<\/strong> for both men and women, meaning anyone reaching this age will receive a notification letter<\/strong> from the Department for Work and Pensions (DWP)<\/strong> around two months before their birthday<\/strong>. This letter gives them two options:<\/p>\n\n\n\n
If no action is taken, the state pension is automatically deferred<\/strong> until the individual decides to claim it at a later date<\/strong>.<\/p>\n\n\n\n
For pensioners who reach state pension age on or after 6 April 2016<\/strong>, the amount they receive increases every week they defer<\/strong>, provided they delay for at least nine weeks<\/strong>. The pension grows by 1% for every nine weeks deferred<\/strong>, which equates to an annual increase of just under 5.8%<\/strong>.<\/p>\n\n\n\n
With the new state pension currently set at \u00a3221.20 per week<\/strong>, deferring for a full year<\/strong> would result in an extra \u00a312.82 per week<\/strong>, which adds up to \u00a3666.64 over the course of a year<\/strong>.<\/p>\n\n\n\n
This increase can be particularly beneficial<\/strong> for individuals who:<\/p>\n\n\n\n
With pension rates rising each year<\/strong>, the potential financial gains from deferring<\/strong> could be even higher in the long run<\/strong>. The government\u2019s Triple Lock policy<\/strong> ensures that state pensions increase based on inflation, wage growth, or 2.5%\u2014whichever is highest<\/strong>.<\/p>\n\n\n\n
In the 2025\/26 tax year<\/strong>, Chancellor Rachel Reeves<\/strong> confirmed that pensions will increase by 4.1%<\/strong>, meaning over 12 million pensioners<\/strong> will receive up to \u00a3470 more per year<\/strong> when the new rates take effect from April. This means that anyone deferring their pension now<\/strong> may see even larger increases in their weekly payments<\/strong> once they decide to start claiming<\/strong>.<\/p>\n\n\n\n
While delaying state pension payments<\/strong> offers a financial advantage, it isn\u2019t the best option for everyone<\/strong>. Some key factors to consider include:<\/p>\n\n\n\n
It\u2019s recommended that individuals assess their financial situation carefully<\/strong> before deciding whether to delay their pension payments<\/strong>.<\/p>\n\n\n\n
Deferring the state pension<\/strong> can be a strategic financial move<\/strong>, but it isn\u2019t suitable for everyone<\/strong>. While an increase of \u00a3666 per year<\/strong> may seem appealing, pensioners should consider their personal circumstances before delaying payments<\/strong>.<\/p>\n\n\n\n
One key factor is life expectancy<\/strong>. The financial benefit of deferring only materialises if you live long enough to make up for the payments you initially missed<\/strong>. Those with health conditions<\/strong> or limited savings may find it more beneficial to claim their pension as soon as they are eligible<\/strong>. On the other hand, pensioners with other sources of income<\/strong>, such as private pensions or savings<\/strong>, might find waiting worthwhile<\/strong> to receive a larger state pension later<\/strong>.<\/p>\n\n\n\n
Economic factors also play a role. While the Triple Lock policy<\/strong> has helped increase pension payments year after year<\/strong>, future changes to government policy could impact these increases<\/strong>. Some pensioners may prefer to take their pension early and invest it elsewhere<\/strong> to generate higher returns<\/strong>.<\/p>\n\n\n\n
Ultimately, choosing whether to defer depends on individual financial stability and long-term goals<\/strong>. Pensioners should review their situation carefully<\/strong> and, if necessary, seek professional financial advice<\/strong> before making a decision.<\/p>\n\n\n\n
Deferring your state pension<\/strong> is a straightforward process<\/strong>. If you do nothing when you reach state pension age<\/strong>, your pension will be automatically deferred<\/strong> until you choose to make a claim<\/strong>.<\/p>\n\n\n\n
For those who have already started receiving their pension but wish to pause payments<\/strong>, it is possible to contact the DWP<\/strong> to arrange a deferral. This allows payments to resume later at an increased rate<\/strong>.<\/p>\n\n\n\n
Before making a decision, pensioners should:<\/p>\n\n\n\n
With state pensions set to increase again in April 2025<\/strong>, deferring could become a more attractive option<\/strong> for some. However, pensioners must ensure they fully understand both the benefits and potential drawbacks<\/strong> before making their decision.<\/p>\n","protected":false},"excerpt":{"rendered":"
Thousands of state pensioners could be eligible for an extra \u00a3666 per year, thanks to a little-known rule that could increase their retirement income. With pensions set to rise again in April 2025, many retirees may be missing out on additional payments without even realising it. Could you qualify for this extra boost\u2014and what steps do you need to take to claim it?<\/p>\n","protected":false},"author":4,"featured_media":10181,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-103692","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33","no-featured-image-padding"],"_links":{"self":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/103692","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/comments?post=103692"}],"version-history":[{"count":2,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/103692\/revisions"}],"predecessor-version":[{"id":103696,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/103692\/revisions\/103696"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/media\/10181"}],"wp:attachment":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/media?parent=103692"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/categories?post=103692"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/tags?post=103692"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}