Extra Basic State Pension - Annual Increases

Oblivion

I'm currently in receipt of my state pension under the existing rules. I deferred claiming it for a short while and get 'Extra Basic State Pension' in my weekly amount as a result.

Am I correct in thinking that this deferment element of my pension only increases annually by CPI and that the 'triple lock' 2.5% only applies to the basic state pension, not any additional pension resulting from deferring?


EDIT: It's ok, just found the answer in one of their pamphlets and my thinking was correct. Just a measly 1.2% increase for the deferred element then.

Alter_ego

They told me extra SP is treated same as basic. Not sure I can rely on that - they also told me I couldn't defer as I had been drawing my SP for a number of years.

JezR

By law, deferred retirement increments and all other parts of the pension are raised by 'not less than the percentage by which the general level of prices is greater'.

By law, the basic state pension is raised by 'not less than the percentage by which the general level of earnings is greater'.

What the measure of prices and earnings are is not detailed in law, but down to the government of the day, as is paying more than the statutory requirement, which the present government has done with respect to the basic state pension only (triple lock).

Oblivion

JezR wrote: »

By law, deferred retirement increments and all other parts of the pension are raised by 'not less than the percentage by which the general level of prices is greater'.

By law, the basic state pension is raised by 'not less than the percentage by which the general level of earnings is greater'.

What the measure of prices and earnings are is not detailed in law, but down to the government of the day, as is paying more than the statutory requirement, which the present government has done with respect to the basic state pension only (triple lock).

Thanks Jez, that's a clear summary and confirms what I'm seeing on the Increases in Pension wef April 2015 statement I received this morning. Only the basic state pension has been increased by the triple lock 2.5% and all the other elements ... Graduated, Additional and Extra (deferment element) have all been increased by CPI (1.2%).

Oblivion

Alter_ego wrote: »

They told me extra SP is treated same as basic. Not sure I can rely on that - they also told me I couldn't defer as I had been drawing my SP for a number of years.

Looks like they told you porkies.


Not sure about the deferment. I thought you could defer twice, once at the start by not claiming when entitled and again later down the road when the pension has been claimed and is in payment, but I'm no expert.

atush

Yes, you can defer after a period of time.

kidmugsy

Oblivion wrote: »

I thought you could defer twice, once at the start by not claiming when entitled and again later down the road when the pension has been claimed and is in payment, but I'm no expert.

Nevertheless:) you are right.

kidmugsy

Anyone who is under (say) 70 and is qualified for deferral on present terms really should consider it. They'll find it impossible to find an alternative investment with comparable returns at comparable risk. The nearest will probably be 3ANICs, assuming that that deal is honoured by the next government.

Alter_ego

Oblivion wrote: »

Looks like they told you porkies.

Yes I was fairly sure they had but hadn't bothered to check, I have deferred on the basis that it's the best deal around. Provided I live another 10yrs, which I fully intend to do!

Convincing HMRC to raise my tax code was fun as well. Took more than 3 months.

kidmugsy

Alter_ego wrote: »

Convincing HMRC to raise my tax code was fun as well. Took more than 3 months.

At one point HMRC had the ludicrous notion that I should act as the channel of communication between them and DWP!