State pension deferral question

uk1

Jennifer_Jane wrote: »

And be careful. You lose the pension you would have had in the hope of increased gain over time.

For me, I deferred for two years, because I didn't have all my years' contributions. That meant I 'lost' over £8,000, and there was one year when the Extra pension, as it's called, wasn't increased at all despite promises from the DWP that it would be treated the same as the Basic State Pension.

My "breakeven" point will be some time well into in my 70's.

Thanks.

Why did the extra pension not receive an increase?

mgdavid

Jennifer_Jane wrote: »

...unnecessary.....
I posted because I thought the OP seemed to be having some difficulty with doing the arithmetic..... more unnecessary.....

so where in your previous post did you explain the arithmetic?
<puzzled>

uk1

mgdavid wrote: »

so where in your previous post did you explain the arithmetic?
<puzzled>

I had originally presumed incorrectly that the increase was compounded. Now I understand.

Jennifer certainly did help by providing an additional piece of information - and that was that increases on the Extra Pension cannot be presumed. That was appreciated.

SeekTruth

uk1 wrote: »

Many thanks.

To clarify. Are you saying that two different rates of increase apply to a deferred pension. The deferred component is increased by CPI and the base amount by the triple lock?

And just to make sure I don't further misunderstand .... is say the 20.8% after say two years increased on the original pension amount 2 years ago or on the new current increased pension at the point it is actually taken?

Thanks again.

Suppose at State Pension Age your entitlement is precisely £100/wk. You defer for 104 weeks (almost 2 years). Let's say that during the deferment your pension entitlement increases to £110/wk ('triple lock' on the Basic element and CPI on the Additional Pension, if any) [Numbers chosen for ease of calculation rather than a realistic prediction!] When you start taking the pension you'll actually receive the £110/wk entitlement plus the Extra element of 20.8% of £110, namely £22.88/wk - giving a total of £132.88/wk.

Once in payment the Basic element continues to increase by 'triple lock' (for as long as the government continues with this), any Additional Pension increases by CPI and the Extra (earned by deferment) also increases by CPI.

uk1

Thanks - that much clearer.

brewerdave

Deferrment of the state pension currently seems a much better deal for a woman than a man; a) because women (currently) can get their pension earlier and b) they are statistically likelier to live longer.
Or am I missing something???

JezR

uk1 wrote: »

Jennifer certainly did help by providing an additional piece of information - and that was that increases on the Extra Pension cannot be presumed. That was appreciated.

The Labour government in one year chose not apply any increase to the additional state pensions and a lower than inflation rate in the following year. Current government policy however is CPI valorisation as said above.

kidmugsy

brewerdave wrote: »

Deferrment of the state pension currently seems a much better deal for a woman than a man; a) because women (currently) can get their pension earlier and b) they are statistically likelier to live longer.
Or am I missing something???

Nope, nothing missed; that's the state of play. Fortunately The Women's Movement will move heaven and earth to right this grievous wrong.

Mojisola

brewerdave wrote: »

Deferrment of the state pension currently seems a much better deal for a woman than a man; a) because women (currently) can get their pension earlier and b) they are statistically likelier to live longer.
Or am I missing something???

a) is already being addressed.

Not sure what you can do about b)!