Deferred pension: lump sum or weekly income

kidmugsy

xylophone wrote: »

Explained in article to which I linked - did you read it?

Webb said "Regarding the other parts of your pension, the additional pension (or ‘SERPS’ pension) is indexed only in line with CPI inflation and the same is also true of your increments for deferral".

mgdavid

greenglide wrote: »

Yes I did.

Stating it is uprated by the triple lock and providing a link to an article that says "oh no it isnt" is by no means clear though.

He didn't; the bit you are calling 'it' said higher state pension (meaning higher than nSP as the OP is on Old Rules). I think you misunderstsood 'it' as all the pension (including ASP & ESP).

atush

In your case, from what you said, take the extra pension

jamesd

xylophone wrote: »

The OP has deferred under "old state pension" rules.

The person in the article has deferred under "old state pension rules".

The article is therefore relevant to his circumstances and explains how "triple lock" is applied to his pension.

Yes, it's relevant and explains that the increase from deferring is increased by CPI for those who reached SPA under the old rules.

Yet you appear to be continuing to disagree with your own source and to be claiming that the money from deferral for those who reached SPA under the old rules gets the triple lock. Just to be sure, is that still your assertion or do you now agree with your source that it's CPI?

Just in case that's still what you think it says, here it is in quotes:

"Let me first of all give an answer to someone such as yourself who has already reached state pension age and then explain how the process will work for those who reach pension age after 5 April 2016.

As you know, at present, when you defer taking your state pension you get an uplift of a little over 10 per cent for each year that you defer.

When you eventually decide to draw your state pension it will be in three parts - a ‘basic’ state pension, currently £115.95 per week, an additional earnings-related state pension which in your case is £32 per week, and then ‘increments’ on your pension for deferral, worth around £15 per week.

In terms of indexation, the basic state pension will be subject to the ‘triple lock’ for as long as this remains government policy. This means it will rise each year by the highest of the growth in prices (measured by the Consumer Prices Index or CPI), the growth in average earnings or a floor of 2.5 per cent.

Regarding the other parts of your pension, the additional pension (or ‘SERPS’ pension) is indexed only in line with CPI inflation and the same is also true of your increments for deferral."

So at this point all should be clear: the increments for deferral for those who reached SPA during the old system are increased only by CPI.

Steve Webb then goes on to discuss the situation for those who reach SPA after the flat rate rules come in but that's not relevant to the question at hand.

jamesd

greenglide wrote: »

I am not convinced that this statement is actually true though.

Most of the underlying components that make up nSP that you never see get added together and go into the nSP amount (subject to a cap of £155.65) or Protected Payment amounts. But the increments for deferral are separate (they are Extra State Pension to distinguish them from Additional State Pension of old) and appear as a separate line on the entitlement notification. The assumption has always been that this would be uprated by the CPI. It is possible that DWP will perform a clerical calculation if the nSP amount is less than the maximum and top up the nSP amount until the maximum is reached but this would be fraught with problems.

I'm not sure either and that's why I used the pencilled in wording. Steve Webb is well informed but you've described what I really expect and I haven't seen anything else saying what he wrote. Maybe someone knows of some other source saying it or maybe the decision just hasn't been finally taken yet. I suppose the earliest we'll possibly know for certain is when the autumn announcement of the increase for 6 April 2017 is made.