State pensioners may be able to increase sum by up to £14.75 by ‘doing nothing’ – can you?

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The state pension is a vital payment for millions, and many will want to get the highest amount possible. Individuals do not get their state pension automatically, which is a common misconception.

Instead, when they reach state pension age, they will have to take action to claim it.

However, each year many people decide they are not going to claim their state pension immediately.

This is a process known as deferring, which involves delaying a claim for a multitude of reasons.

One of the primary reasons for deferring the state pension is that it could increase the payments a person gets when they do decide to claim it.

If a person wants to defer, the Government website states they should “do nothing” as their pension will automatically defer until they claim it. 

The amount of extra state pension a person could receive is dependent on when they reach state pension age.

There are set rules for those who reached state pension age on or after April 6, 2016.

Their state pension will increase for every week they defer, as long as this is done for at least nine weeks.

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The sum increases by the equivalent of one percent for every nine weeks of deferral, working out as just under 5.8 percent for every 52 weeks.

For example, if someone gets the full new state pension of £185.15 weekly, by deferring for 52 weeks, they will get an extra £10.70 a week.

The extra amount is paid out with a person’s regular state pension payments.

Rules, however, slightly differ for those who reached state pension age before April 6, 2016.

Their state pension will increase for every week of deferral, as long as this is done for five weeks.

For each five week period, the state pension rises by the equivalent of one percent.

Ultimately, this means a 10.4 percent increase for every 52 weeks.

Those who are in receipt of the full basic state pension of £141.85 a week could see this increase by £14.75 per week just for deferring for 52 weeks. 

These state pensioners can take their extra state pension as either a lump sum or through higher weekly payments.

Individuals can get the lump sum if they defer claiming their state pension for at least 12 months in a row, and it will include interest of two percent above the Bank of England base rate. 

However, both older and newer retirees could stand to gain even more, as the examples do not factor in the typical annual increase in the state pension.

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With the triple lock making a return next year, pensioners who defer could get even more.

The Government explains: “After you claim your state pension, the extra amount you get because you deferred will usually increase each year based on the Consumer Prices Index. It will not increase for some people who live abroad.”

Just Group research from 2021, showed many Britons were not aware of state pension deferral or how it could potentially help them.

Stephen Lowe, group communications director at Just Group, said: “Deferring state pension is still available and is something that should be considered alongside other retirement options.

“In some circumstances it can make sense to forego some income in the short term for a higher income in later life that is guaranteed to keep up with inflation.

“Our concern is that a quarter of over-65s are unaware it is an option, raising questions about the support they are receiving when making pension decisions.”

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