New State pension advice

Murf1400

I am planning to work beyond my retirement date. I have been told by an acquaintance that he deferred for 11 months and received a lump sum. I have tried to speak with DWP and they tell me this is not an option. Has anyone had similar or can advise, please. 
I do understand the pre 2016 rules, I am a little confused re the post 2016 rules due to some conflicting discussions.

la531983

The post 2016 rules are here. Basically, you dont have a lump sum option anymore and you get an extra 1% for every 9 weeks you defer

https://www.gov.uk/deferring-state-pension/what-you-get

Murf1400

That is how I understand it, however a person I know is adamant he got a lump some as late as 2022, I cannot say he did not, nor have I got and evidence he has, bit in between here, but thanks for your prompt reply.

Dazed_and_C0nfused

You can get a "lump sum" but it is a totally different situation to pre 2016 rules where the lump sum from deferring was taxed under special rules.

Your only option for getting a lump sum post 2016 is to make a backdated claim and that negates some (or all) of the benefit of deferring.

For example say you reach SPa in April 2024 and defer for 11 months. You can then apply to receive your State Pension from the original date of entitlement of April 2024 and receive a lump sum of the pension due for the previous 11 months.

But as I understand it you would not get any increase to the rate of State Pension as you have ended up claiming it from the normal State Pension age so it could be argued you would be better off simply getting it on time and putting it in a savings account.

The other potential disadvantage of the backdated lump sum is that any tax could be payable in a big chunk rather than be spread out.

molerat

The only "lump sum" option with the post 2016 pension is receiving up to one year of backdated payments.

Murf1400

These recent comments would fit in with the advice I have been getting personally, its not made clear on any website I have been reading, I think the '11 month' target and calling it 'backdated' rather than a 'lump sum' is my next move with DWP, I would just like it in writing from them or at least an indication on their website, cheers folks.

la531983

Given there doesnt seem to be any actual benefit in waiting 11 months and then asking for it in one go (as posted above), what is your thinking as to why you want to persue this?
You can draw it weekly straight away and whack it in a easy access savings account getting at least low 4%s, maybe more if you look properly, if you dont need the money yet.
Or, defer it and get the extra 1% for each nine weeks.

Dazed_and_C0nfused

Age Concern have a half decent guide here,

https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.ageuk.org.uk/globalassets/age-uk/documents/factsheets/fs19_state_pension_fcs.pdf&ved=2ahUKEwj_qOKg9vSAAxUDUkEAHUawD7AQFnoECBIQBg&usg=AOvVaw250FoThvfD_U8QVfUxSA1N

la531983

Dazed_and_C0nfused said:

Age Concern have a half decent guide here,

https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.ageuk.org.uk/globalassets/age-uk/documents/factsheets/fs19_state_pension_fcs.pdf&ved=2ahUKEwj_qOKg9vSAAxUDUkEAHUawD7AQFnoECBIQBg&usg=AOvVaw250FoThvfD_U8QVfUxSA1N

6.1 suggests no interest is payable on any backdated payment, so failing to see the benefit of doing it, yes its a handy thing for anyone who simply "forgets" to claim it but I wouldnt be going out of my way to backdate a claim imo.