Deferred/delayed state pension



  • eastcorkrameastcorkram Forumite
    237 Posts
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    My father in law had a lump sum of £78,000, and an increased pension by £38.00 on top of £143.00.
    He was also offered an extra £202.00 and no lump sum , taking the pension to about £345.00
    He went for the lump sum option. I can't remember how much it was after tax. Passed away about two and a half years after that decision.
    I think he had deferred for about 14 or 15 years. Not really deliberately. I don't think he'd given it much thought. Had an army pension, and a very simple, cheap , lifestyle.

  • Notepad_PhilNotepad_Phil Forumite
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    Although what the caller was saying is correct, my only comment would be to make doubly sure that they are actually legitimately from DWP and not some scammer who has got wind of the fact that she is not currently claiming her pension and so is due an amount of money.....
    Thanks, my mother contacted them not the other way around so it is definitely legitimate.  I'll show her these comments to reassure her and to be cautious of who she is speaking to.

    Best make sure that she has not got in contact with someone because of an advert that she saw somewhere. A lot of people come here after contacting someone that they found via an ad on facebook, google, etc and they've been scammed out of their money - with regard to google, many people do not notice the 'ad' notifier on their results and just click the top entry, which can end up with unfortunate results.
    If it were me, then I'd get the number that she rang double checked via the relevant web page.
  • Thanks for all your previous comments.  It is definitely someone from HMRC who she has contacted and not a scammer.  I've showed her all the comments so she is very clued now in about who she is speaking to (much more than before!).  She is just waiting on a letter now outlining her options as regards to taking a lump sum or extra pension payments although she has fairly much made  her mind up that she wants the lump sum.  She does understand that she will pay tax on the lump sum but that's life.  I'll post back with more info when she's had confirmation of her amounts/figures. At this stage she can only guess/estimate how much she is entitled to. 
  • xylophonexylophone Forumite
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    She does understand that she will pay tax on the lump sum but that's life.  

    Be careful about this -

    As explained by Robin Williamson in his article ‘Curiouser and Curiouser’ in August’s Tax Adviser, F(2)A 2005, sections 7–9 provide quite simply that the lump sum is treated as income but is not counted when determining the total income of any person. So if a person’s income apart from the pension lump sum (‘other income’) is totally covered by their personal allowances, the pension lump sum is taxed at a nil rate. If their other income less allowances is below the basic rate limit, the pension lump sum is taxed at the basic rate, at the higher rate if other income is between the basic rate limit and the higher rate limit, and at the additional rate if other income exceeds the higher rate limit.

  • edited 17 August 2020 at 11:06AM
    p00hsticksp00hsticks Forumite
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    edited 17 August 2020 at 11:06AM
    Thanks for all your previous comments.  It is definitely someone from HMRC who she has contacted and not a scammer. 
    I suspect you mean the DWP Pension Service (Pension Centre if in Northern Ireland ?) as it's them who administer and deliver the State Pension - HMRC simply keep the NI records.
  • badmemorybadmemory Forumite
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    Fifth Anniversary 1,000 Posts Name Dropper
    Please ask her to look carefully at the figures.  She may be able to buy that motorhome with an interest free loan.  Many sellers of new vehicles are getting desperate!  Even if she only has the basic state pension & no SERPS etc that is currrently about £130 per week which deferred is almost £300 per week.
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