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  • FIRST POST
    • Steve_GP220
    • By Steve_GP220 8th Sep 17, 5:34 PM
    • 31Posts
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    Steve_GP220
    State pension deferral...
    • #1
    • 8th Sep 17, 5:34 PM
    State pension deferral... 8th Sep 17 at 5:34 PM
    I read somewhere on the forums here that given I am going to work until I'm 70, I could get my state pension deferred and that in doing so, I would be quids in. Can anyone give me more information on that, and how I go about it please?
Page 1
    • p00hsticks
    • By p00hsticks 8th Sep 17, 5:40 PM
    • 5,589 Posts
    • 5,134 Thanks
    p00hsticks
    • #2
    • 8th Sep 17, 5:40 PM
    • #2
    • 8th Sep 17, 5:40 PM
    It's not as good deal as it was - the rate of increase is lower than it was under the old rules, and you no longer have the option of getting a lump sum, just an increased weekly rate.

    Your pension will increase by 1% for every nine weeks you defer.

    You can defer by simply not claiming when you reach State Pension age.

    Detaisl here;
    https://www.gov.uk/deferring-state-pension
    • Silvertabby
    • By Silvertabby 8th Sep 17, 7:18 PM
    • 1,514 Posts
    • 1,809 Thanks
    Silvertabby
    • #3
    • 8th Sep 17, 7:18 PM
    • #3
    • 8th Sep 17, 7:18 PM
    It's now just over 5% for each year of deferral, instead of over 10% under the old scheme.

    We thought about it (Mr S gets his State pension next year) but have decided to take it and save it - we may not get as much as 5%, but the money is ours.

    We've already retired, and he will pay 20% tax on his State pension - but if you are still working and if the State pension will tip you into the 40% bracket then deferral may be worth thinking about.
    Last edited by Silvertabby; 08-09-2017 at 9:17 PM.
    • bostonerimus
    • By bostonerimus 9th Sep 17, 12:56 AM
    • 862 Posts
    • 436 Thanks
    bostonerimus
    • #4
    • 9th Sep 17, 12:56 AM
    • #4
    • 9th Sep 17, 12:56 AM
    If you can afford to defer the state pension it's worth considering....an index linked guaranteed 5% is pretty good.
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    • badmemory
    • By badmemory 9th Sep 17, 2:22 AM
    • 681 Posts
    • 668 Thanks
    badmemory
    • #5
    • 9th Sep 17, 2:22 AM
    • #5
    • 9th Sep 17, 2:22 AM
    5.8% as opposed to the old 10.4%. Still not to be sniffed at. It depends to a certain extent on your other pension provision & obviously your life expectancy. But taking it now plus the full tax hit if you don't need it seems to me to be not such a great idea. But then I speak as one whose deferral is paying for their current lifestyle. There is no way that taking & saving could have provided what I now have - every 4 weeks for the rest of my hopefully very long life. Only a few months now to break even point!
    • GibbsRule No3
    • By GibbsRule No3 9th Sep 17, 9:57 AM
    • 626 Posts
    • 360 Thanks
    GibbsRule No3
    • #6
    • 9th Sep 17, 9:57 AM
    • #6
    • 9th Sep 17, 9:57 AM
    It's now just over 5% for each year of deferral, instead of over 10% under the old scheme.

    We thought about it (Mr S gets his State pension next year) but have decided to take it and save it - we may not get as much as 5%, but the money is ours.

    We've already retired, and he will pay 20% tax on his State pension - but if you are still working and if the State pension will tip you into the 40% bracket then deferral may be worth thinking about.
    Originally posted by Silvertabby
    I keep reading that the State Pension is not taxed, only the other pensions or savings, are taxed after the Personal Allowance rate is exceeded.
    Paddle No 21
    • molerat
    • By molerat 9th Sep 17, 10:10 AM
    • 17,009 Posts
    • 11,187 Thanks
    molerat
    • #7
    • 9th Sep 17, 10:10 AM
    • #7
    • 9th Sep 17, 10:10 AM
    I keep reading that the State Pension is not taxed, only the other pensions or savings, are taxed after the Personal Allowance rate is exceeded.
    Originally posted by GibbsRule No3
    The State Pension is not taxed at source but your personal tax free allowance (for PAYE purposes) is reduced by that amount which, in some cases, can lead to a K code being applied to other income.
    Last edited by molerat; 09-09-2017 at 11:42 AM.
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    • xylophone
    • By xylophone 9th Sep 17, 10:15 AM
    • 22,876 Posts
    • 13,233 Thanks
    xylophone
    • #8
    • 9th Sep 17, 10:15 AM
    • #8
    • 9th Sep 17, 10:15 AM
    I keep reading that the State Pension is not taxed, only the other pensions or savings, are taxed after the Personal Allowance rate is exceeded.
    The state pension is paid gross but it is still taxable income.

    See http://www.litrg.org.uk/tax-guides/pensioners-and-tax/how-my-tax-collected
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