Deferred pension calculator

Silver_Vixen

I deferred my state pension and want to take it soon. Is there a calculator anywhere so I can work out the best week to take it. I mean just after another 1% has been added at the end of a 5 week period. It is difficult to work out exactly when deferrment starts. Is it the Monday after the week I would have qualified for the state pension? I would hate not to maximise the amount I get.

greenglide

You could ask the pension service ? If DWP don't know, nobody does. Just ring up the claims number and ask them.

There are differing opinions here as to whether you get an increase for every week over five weeks of whether it is 1% for each complete 5 weeks.

You can work it out with a calender counting every 5 week period from you 65th birthday or whatever your State Pension age is if female..

LXdaddy

Although there have been differing opinions, we *have* determined that the extra pension is calculated as 0.2% per week of deferral (provided that you defer at least 5 weeks and your normal retirement date is before 6 April 2016.

I have no idea what actually counts as a week ( ie what is the start date of a deferral and when you start drawing your pension what is the end date of the deferral) Asking DWP is probably best in terms of getting it right.

But as we have found that it is not 1% per 5 weeks but 0.2% per week the impact of picking a less than optimal date is lower.

greenglide

There are still differing opinions on this which have not been proven either way. There would appear to be no definite evidence in the public domain to prove this.

The changes from 6/4/2016 (for nSP) merely increase the period from 5 weeks to 9 weeks but the way that DWP calculate it will remain the same. The way that they do this may also not be consistent.

In this case simply take the original pension date (65th birthday or female SPA date as appropriate) and count forward from that. The DWP will ignore the odd days to the payday that you don't get paid for.

Silver_Vixen

Thanks Guys. I'll try the DWP.

Silver_Vixen

The DWP say the calendar starts on the Monday following your SPA date.

uk1

LXdaddy wrote: »

Although there have been differing opinions, we *have* determined that the extra pension is calculated as 0.2% per week of deferral (provided that you defer at least 5 weeks and your normal retirement date is before 6 April 2016.

I have no idea what actually counts as a week ( ie what is the start date of a deferral and when you start drawing your pension what is the end date of the deferral) Asking DWP is probably best in terms of getting it right.

But as we have found that it is not 1% per 5 weeks but 0.2% per week the impact of picking a less than optimal date is lower.

This is exactly the case. 5 weeks minimum deferral and then 0.2% per week rounded down to the completed weeks. So 24 weeks and 6 days is 24 weeks. The deferred part then increseases by CPI.

If this wasn't the case they would have said in the guidance 0.2% / 7 ie a deferral rate per day rather than as they have clearly said a weekly rate @ 0.2%.

So the first "hot spot" is to ensure you defer to a whole week (I do not know how .....) and then the second and easier "hot spot" is to defer to the first day of the new tax year (if you can) to get it increased against the triple lock updated amount.

greenglide

So the first "hot spot" is to ensure you defer to a whole week (I do not know how .....)

Under "old rules" (before nSP) you cannot defer for anything other than whole weeks, it is only paid in whole weeks (apart for some people who are on a benefit before SPa who get paid the odd days up the the first payday but they can't defer).

nSP, in theory, does allow deferment for part weeks but heaven knows how that would work.