Is 10.4% Govt Pension interest compound?

Alanxx

My wife has so far deferred her Government pension for almost two years on the basis of receiving an extra 10.4% per annum,but is that interest compound or simple i.e.after 2 years will she receive 20.8% or approx 21.8% extra. Is the answer the same regarding the calculation of interest if she takes a lump sum i.e.simple or compound.

sleepless_saver

Basically you get 1% more for every 5 weeks you put off claiming so for example after 100 weeks you would get 20% more at the point when you claim.

Your wife might want to have a look at pages 12 to 19 of the Pension Service booklet on deferral, which includes useful examples as well as ready reckoner tables for her to check her circumstances and options. Remember the lump sum may be taxable.