State Pension deferral - incorrect result ?

uk1

greenglide wrote: »

Not at all.

Several of the DWP sites tell it like it is, such as:-



But unfortunately they do confuse things elsewhere.

You’ll need to defer for at least 9 weeks - your State Pension will increase by 1% for every 9 weeks you put off claiming. This works out at just under 5.8% for every full year you put off claiming.

I am told, by people who do know, that this is what the legislation and, crucially, what the regulations lay down and it is how the DWP perform the calculations.

It is still madness. There is no logic in it being the way it is.

Yes - that is a different scheme isn't.

As "several DWP sites show it as it is" then please post one where it states the same for the earlier scheme ie where it says if for the 10.4% scheme. At the moment all we have is a worked example which shows a calculation per week.

Thanks.

Jeff

greenglide

Defering of SP and nSP are covered by the same basic legislation - social security contributions and benefits act 1992 Schedule 5 as amended. A copy is here http://www.legislation.gov.uk/ukpga/1992/4/pdfs/ukpga_19920004_310515_en.pdf

The actual meaning isnt terribly clear. The minimum to get anything (originally 7 weeks until 2004 when it was changed to 5 weeks and the 9 for nSP) is clear. The interpretation of an "incremental period", which is the same for SP and nSP, is the key.

Alter_ego

LXdaddy wrote: »

If the 1% per 5 weeks was added to your pension on the date you deferred then you would miss out on all the triple locked increases in the period of deferral.

Yes but if I defer for say 3 years, the extra pension payments in respect of yr 1&2 triple lock increases would be at the year 3 rate.
I like that idea but I cant see DWP being that generous.

uk1

greenglide wrote: »

Defering of SP and nSP are covered by the same basic legislation - social security contributions and benefits act 1992 Schedule 5 as amended. A copy is here http://www.legislation.gov.uk/ukpga/1992/4/pdfs/ukpga_19920004_310515_en.pdf

The actual meaning isnt terribly clear. The minimum to get anything (originally 7 weeks until 2004 when it was changed to 5 weeks and the 9 for nSP) is clear. The interpretation of an "incremental period", which is the same for SP and nSP, is the key.

Thanks yes you are repeating the same presumptions. You stated that there were countless DWP web sites confirming the same thing. There must therefore be an identical site giving exactly the same approach for the old one. I haven't seen it and you haven't posted an example.

To repeat again - but you won't accept - the illustration of the old scheme specifically chose to illustrate it per week not per five weeks. There is no mention anywhere I have seen that indicates it is for every five weeks. Can you please settle this once and for all and post where it says this please.

Jeff

uk1

Contents superceded #48

uk1

patanne wrote: »

Until they dumbed down their site 4/5 years ago it stated that once you had 'served' the initial 5 weeks then the accrual rate was 0.2% per week of the old state pension & that was what I got. 52.2% to be precise. Then they dumbed the site down to the new wording. I got the 52.2% after this dumbing down. This may still be the case with the nSP. But I suspect the DWP have no more idea than we do!

We're discussing the "old scheme". That would be therefore a weekly increment.

Edited:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/324636/br1.pdf

Extra State Pension

You can choose to get extra State Pension if you put off claiming your State Pension for 5 weeks or more. When you do claim, you will get a higher weekly State Pension for the rest of your life.

The amount of extra State Pension you get is 0.2% of your weekly State Pension for each week you have put off your claim. This works out at 1% for every 5 weeks, and 10.4% for a full year.

When your State Pension increases every April, your extra State Pension will
usually increase as well. The State Pension is not increased in all overseas

Thanks for helping clear that up!

Jeff

John_Pierpoint

Triumph13 wrote: »

Just a thought triggered by your mention of maternity allowance - you weren't paying married women's reduced stamp for some of those 49 years were you?

What actually happened was I got summonsed to an interview to explain a gap of nearly 3 months in my NI contributions - or "stamps" as we called them in 1965. I had spend summer '64 building this:
http://www.mirror.co.uk/news/uk-news/ferrybridge-power-station-fire-dramatic-3944811
So the civil servant probably thought I had spent summer '65 on "the lump"

I told him I had been away enjoyed nice long lazy summer days on holiday - which was sort of true.

So desperate to turn me into a wage slave, he came up with the possibility that, what we would now call a "significant other or partner", might miss out on the maternity benefit.
http://www.adamsmith.org/tax-freedom-day/

I felt like saying "Do you know something I don't" but bit my lip and managed to keep a straight face (& crossed my fingers).

Anyway back to deferment:
Benefits claimed and received under the general description of "pension" can be the subject of differing "inflation proofing".

Can anyone list the inflation proofing applying to different parts of a "pension"?
Does the additional amount of annual income resulting from "deferment" benefit from "triple lock" inflation proofing for subsequent years?

LXdaddy

Quote:
Originally Posted by LXdaddy
If the 1% per 5 weeks was added to your pension on the date you deferred then you would miss out on all the triple locked increases in the period of deferral.

Alter_ego wrote: »

Yes but if I defer for say 3 years, the extra pension payments in respect of yr 1&2 triple lock increases would be at the year 3 rate.
I like that idea but I cant see DWP being that generous.

let's take the example of someone due to retire in 2013 with a State Pension exactly equal to the basic pension - no SERPs etc.


If they had taken the pension at that point it would have been increased in 2014 by a triple lock amount, then again in 2015 by a tripe locked amount and again in 2016 by a further triple locked amount. The actual increase % in those three years might have been different (I don't have the actual figures but assume that they were increased by 2.5%, 3%,3.5% in those years)
If instead the pension was deferred by 3 years the latest Basic pension has still been increased by the three (different) triple locks - that becomes the basis of the extra pension calculation - latest basic pension * 156 weeks / 5 * 1% ie 31.2%

John_Pierpoint

I have been busy on other things, but today I got a helpful response on the claim line.

The computer has worked out that I have deferred for 231 weeks. [Sounds about right]
Had I claimed in 2011 I would have got £109.97 per week.
This has now grown to £124.70 due to the annual up-rating.

Due to deferment I can also claim £26,679.10 as a taxable lump sum
or
get an extra £50.81 added onto the weekly pension.

Clever mathematicians out there does that sound right ?

[I am still not clear as to the different rates of "inflation" proofing applying to the different elements of a state pension]

As a bloke, I think my "kick the bucket" target is age 84

I think I will try to align the initial pension payment with the new tax year.

LXdaddy

John_Pierpoint wrote: »

I have been busy on other things, but today I got a helpful response on the claim line.

The computer has worked out that I have deferred for 231 weeks. [Sounds about right]
Had I claimed in 2011 I would have got £109.97 per week.
This has now grown to £124.70 due to the annual up-rating.

Due to deferment I can also claim £26,679.10 as a taxable lump sum
or
get an extra £50.81 added onto the weekly pension.

Clever mathematicians out there does that sound right ?

[I am still not clear as to the different rates of "inflation" proofing applying to the different elements of a state pension]

As a bloke, I think my "kick the bucket" target is age 84

I think I will try to align the initial pension payment with the new tax year.

124.70 * 231 / 500 = 57.61 according to my calculator.
I can't comment on the Lump Sum calculation.