People have been urged to defer their state pensions, because opting to delay taking Department for Work and Pensiosn ( DWP ) could benefit you.
People aged between 55 to 64 have been urged to take advantage of a £954 a year payment boost. People have been urged to defer their state pensions, because opting to delay taking Department for Work and Pensiosn ( DWP ) could benefit you.
A recent study by later-life financial specialists Just Group has revealed that one in four people in this age bracket (25 per cent) are unaware they can defer their state pension.
By delaying their claim, pensioners receive an increase of one per cent for every nine weeks of deferral, which is equivalent to nearly 5.8 per cent extra per year. In the 2025/26 financial year, the full new state pension is valued at £230.25 per week.
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It means anyone deferring their pension by one year would see their weekly payments increase by approximately £13.35.
For individuals who reached retirement age before April 6, 2016, and are eligible for the basic state pension, they earn an additional one per cent for every five weeks they postpone their claim.
This equates to a 10.4 per cent yearly increase, or £954.20. Dean Butler, the managing director for Retail Direct at Standard Life, said: “The reality is there’s a significant gap between what you get from the statepension and what you may actually need or want in retirement.
“The state pension only covers a very basic lifestyle – less than is needed for a minimum standard of living in retirement, according to the Pensions and Lifetime Savings Association – and, because it only starts in your late 60s, it won’t help to support you if you want to retire earlier.
“It should therefore only form part of your overall retirement plan and, so, it’s important to fully understand how much you might need to save into your personal or workplace pension plan to potentially be able to afford the retirement you want.”
The state pension counts as taxable income, so add it to your regular income and it’s taxed at your highest tax rate, whether that’s 20%, 40% or 45%.
