New State Pension Guide

xylophone

https://www.thisismoney.co.uk/money/pensions/article-7399265/My-husband-deferred-state-pension-refused-lump-sum.html

Dazed_and_confused

This is what Age Concerns comprehensive guide has to say about this,

6.1 Backdating and advance claims

You can claim your State Pension up to, but no more than, four months in advance. It is a good idea to claim in advance as it may take a while
for your claim to be processed. The maximum period of backdating is 12 months, but a claim cannot be backdated to a date before you reached State Pension age. You are not paid interest on any backdated pension.

If you claim more than 12 months after you became entitled, you are
treated as having deferred it (see next section).

6.2 Putting off or deferring State Pension

When you reach State Pension age, you can put off or defer claiming State Pension, which means you may receive a higher rate of State
Pension later on. If you start receiving State Pension, it is possible to change your mind and start to defer it, but this can only be done once.
You have to defer for at least nine weeks. Your new State Pension increases by one per cent for every nine weeks you defer or about 5.8
per cent for a full year. You can defer claiming for as long as you like. This increased amount is paid on top of your new State Pension when
you start claiming and counts as taxable income. You cannot take the extra amount as a lump sum payment and if you die before your spouse or civil partner, they cannot inherit any of your increase.

This may not be right for everyone and whether you gain overall depends on your circumstances. In particular, if you or your partner claim certain benefits such as Pension Credit, Universal Credit or income-related Employment and Support Allowance, you do not receive any increase for each whole week in which you receive the other benefit.

Straightbat

Xylophone this part of Steve Webb's article doesn't make sense:

"Because you can make a (non-deferred) claim up to a year after pension age and have it backdated, this first year's money can then be paid as a lump sum.

The balance of the deferred money has then been converted into an enhanced weekly state pension."

How can there be a "balance of the deferred money" if it has all been paid as a lump sum going back to the claimant's pension age? 7

Rereading it I think it is confusing because Steve Webb assumes that backdating of a deferred claim is only applicable in the first year after pension age whereas in fact it can happen after any length of time. But Steve seems to think the DWP are offering a concession by backdating after the first year.

Dazed and c it appears a "deferred pension" is a technical term as used by Steve Webb in the article, but as far as I am concerned my pension has been deferred if I do not take it when I could even if I later backdate it to its start date! (Even Steve Webb refers to "the balance of the deferred money" which is being claimed retrospectively. It is deferred, even when it is subject to a backdated claim).

50Twuncle

In my case - with an estimated state pension of around £138 - due to "contracted out" public service pension, do I still get the potential of a pension increase if I delay claiming for x years ?

Straightbat

50Twuncle wrote: »

In my case - with an estimated state pension of around £138 - due to "contracted out" public service pension, do I still get the potential of a pension increase if I delay claiming for x years ?

(new state pension rules) Provided you defer for at least 9 weeks, you will get an increase of 1% for every 9 weeks of deferment including the first nine weeks. The increase will be calculated pro rata to the number of weeks where the deferment is not an exact multiple of nine weeks (e.g. 12 weeks, 1.33%). I have been advised that a part week would be rounded up. I understand you can defer for as many years as you want (although maybe the rules about increases could change in future)?

Dazed_and_confused

Dazed and c it appears a "deferred pension" is a technical term as used by Steve Webb in the article,

I did start one of yesterday's posts by stating

"Deferment" of State Pension is not deferment in the normal sense, it has special rules.

At the end of the day as far as the State Pension is concerned "deferment" is not the same thing as claiming late and asking for a backdated lump sum payment.

Not sure there is really anything more I can say really.

Dazed_and_confused

In my case - with an estimated state pension of around £138 - due to "contracted out" public service pension, do I still get the potential of a pension increase if I delay claiming for x years ?

What makes you think it might not apply to you?

hyubh

Straightbat wrote: »

Dazed and c it appears a "deferred pension" is a technical term as used by Steve Webb in the article, but as far as I am concerned my pension has been deferred if I do not take it when I could even if I later backdate it to its start date!

FWIW, in a pensions context, the state pension sense of 'deferred' is the normal one. So an occupational DB pension 'deferred' after the scheme's normal retirement age would typically have a 'late retirement factor' applied when it does finally come into payment (rather than backdating)...

Straightbat

Dazed and c - well I've still deferred taking my pension, even if I then backdated it a year and took the backdated payments as a non enhanced lump sum. And if that's how I choose to use the word "deferred" (as Steve Webb himself did) it is jumping to the wrong conclusion to assume the alternative (in fact Steve Webb felt the need to define it specifically when referring to a deferred pension in the sense that you expected me to ;-) ).

badmemory

To be honest I am still at a loss as to why you would want to do this. To take money without interest & quite possibly taxed. You could presumably do without it at the time or you would have taken it. Why is it now so urgent to take it, maybe pay tax on it, when you could increase your income for the rest of you life. Unless your life expectancy has recently seriously shortened (in which case my apologies for my intrusion) then there is no way any investment of this amount is going to cover what you are giving up in annual income.