This guide explains how to delay (defer) taking up your State Pension. Find out how a deferred pension payment changes what you get as extra State Pension or as a lump sum.
DELAYED PENSION PAYMENT: As a rule, you will receive a BR33 letter and booklet four months before you reach State Pension age.
The letter explains how to claim your State Pension. But, you can decide to delay (defer) claiming your pension.
What happens if you decide to defer (delay) your State Pension? In most cases, the payments will have increased by the time you start claiming the money.
Note: There are pros and cons to the deferment of State Pension. Taking later payments can make them liable for taxes when you get a pension.
If you are claiming certain benefits you cannot get extra State Pension. Deferring your State Pension can also affect your claim to some benefits. If you get benefits and want to defer your State Pension you must let the Pension Service know.
Delaying State Pension means the amount you get in the future increases for each deferred week. But, you must defer for at least nine (9) weeks to qualify for any increase.
The increase in your State Pension goes up by approximately 1% for each 9 weeks you defer. For a full year this is a little less than a 5.8% increase. Extra amounts get added to, and paid with, your regular pension payments.
When you start taking up your State Pension there are two ways you can get the extra money from deferment:
When you make a claim for your State Pension you have three months to contact the Pensions department. You must inform them how you want to get the extra deferred pension payments.
When you defer your State Pension the amount you will receive in the future will increase for each week deferred. But, you must defer for at least five (5) weeks to qualify for any increase.
The increase in your State Pension goes up by approximately 1% for each 5 weeks you defer. For a full year this is a little less than a 10.4% increase. Extra amounts get added to, and paid with, your regular pension payments.
If you defer claiming your State Pension for a minimum of 12 months you can get a one-off lump sum payment. The amount will be the total amount you deferred plus interest of 2% above the Bank of England base rate.
If you are over State Pension age you cannot defer your State Pension for extra payments while in prison. You can start deferring after leaving prison.
The increase to deferred pension payments gets based on the annual increase of the Consumer Price Index. These annual increases start when you claim your State Pension. As a rule, there is no such increase if you live abroad.
If you get any of the following benefits or tax credits you cannot defer your State Pension to get extra payments at a later date:
If your legal partner gets any of the following you cannot defer your State Pension to get the extra payments at a later date:
If you get extra State Pension as increased weekly payments it may cut the money you get from:
Note: Take your deferred extra State Pension as a lump-sum can lower your tax credits or Universal Credit payments.
Claiming State Pension after deferring the payments means you will need to claim for a Winter Fuel Payment. The main reason is that to defer your pension you do not claim your State Pension. Thus, the state does not know that you are alive and entitled to the Winter Fuel Payment.
Note: Your nearest Jobcentre Plus can help explain how welfare benefits may get affected by deferred State Pension payments.
The rules for deferring your UK State Pension in the following countries are the same as the United Kingdom:
If you live in a country that is not on this list you will get the extra payment when you claim your State Pension. But you will not have entitlement to yearly increases.
If you live in a country that is not on this list you will still get the extra payment. But, it gets based on the State Pension owed - based on the latest of the date you reach State Pension age or moved abroad.
If you need further help to work out what your entitlement is contact the International Pension Centre.
There are several different ways of claiming a deferred State Pension (depending on how long you deferred it):
State Pension Claim Line
Telephone: 0800 731 7898
Textphone: 0800 731 7339
Monday to Friday: 8am to 6pm (except public holidays)
Check the call charges in the United Kingdom.
Note: The process of delayed pension payment in Northern Ireland is different.
As a rule, you can inherit your partner's extra State Pension. But, all the following need to apply:
One of the following also needs to apply if your partner died before the 6th of April 2010.
Note: You will only get the inherited deferred State Pension when you are of State Pension age.
Collecting your partner's deferred State Pension is dependent on the length of time they had deferred their pension.
If they deferred for a year or more there are two options. You can choose to inherit it as a lump sum. The other option is to receive it as extra weekly payments on your new State Pension. You will get a letter explaining your options.
If they deferred for between 5 weeks and a year then you will inherit these payments with your own weekly State Pension payments.
If they deferred their State Pension for less than 5 weeks then their State Pension payments will get treated as part of their estate. As with the rest of the total of their property, investments, money and possessions, it gets dealt with in their 'Will'.
If they were already receiving their deferred State Pension then you will get these payments with your own weekly State Pension payments.
Deferring State Pension Payments (delaying) in United Kingdom