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Putting off claiming your State Pension

If you put off claiming your State Pension, you can earn either extra State Pension or a one-off taxable lump sum payment. Knowing your options helps you make better decisions when you reach State Pension age.

What is State Pension deferral?

State Pension deferral means you can put off claiming your State Pension when you reach State Pension age or choose to stop claiming it after having claimed it for a period. Since the State Pension was introduced, people have been able to earn extra State Pension in this way.
Your State Pension age is set by law. The age at which you retire from employment does not affect when you can start drawing your State Pension.

More choice when deferring your State Pension

Now that people are living longer and healthier lives, it makes sense to make it easier to work flexibly after State Pension age.
If you put off claiming your State Pension (whether you are working or not), you can choose one of the following options when you do claim.

Extra State Pension

If you put off claiming your State Pension for at least five weeks you can earn an increase to your State Pension of 1% for every five weeks you put off claiming. (This is equivalent to about 10.4% extra for every year you delay claiming, compared to about 7.5% extra before 6 April 2005.)a

A lump sum payment

If you put off claiming your State Pension for at least 12 consecutive months, which must all fall after 5 April 2005, you can choose to receive a one-off lump sum payment and your State Pension paid at the normal rate. The lump sum payment, when you claim it, will be based on the amount of normal weekly State Pension you would have received, plus interest added each week and compounded.
Before 6 April 2005 you could only earn extra State Pension for up to five years. Now you can put off claiming your State Pension for as long as you want in order to earn extra State Pension or a lump sum.

What if I reached State Pension age before April 2005?

If you reached State Pension age before April 2005 and have started claiming your State Pension, you can choose to cancel your claim to build up entitlement to extra State Pension or a lump sum payment.
Note that you can only cancel your claim in this way once and only if you are normally resident in the UK. (You may also have this option if you are residing in the European Economic Area or Switzerland, and are either a national of one of those countries or otherwise entitled to live there.)

If you have not claimed your State Pension, when you finally do claim it, you will get an increase for the period up to 6 April 2005 based on the old rate of extra State Pension (about 7.5% for a whole year). For the period falling after that date, you will be eligible either for an increase based on the new extra State Pension rate (about 10.4% for a whole year) or, if you continue to put off claiming for a further 12 months, a lump sum payment.

What do you need to do to defer claiming your pension?

If you have not yet claimed your State Pension but you want to put off taking it up, you do not need to do anything.
If you are already getting your State Pension, but you would like to stop claiming it to earn extra State Pension or a lump sum, you should contact your pension centre. (The telephone number will be on any letters you have received from your pension centre.)

© Crown copyright information issued by Her Majesty’s Government

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