Deferring a State Pension

TonyM19

Hi

Just trying to work out if it is worth deferring my state pension by a few weeks.  I have seen conflicting advice on this.  Some say that if I defer by 5 weeks I would get a 1% boost on my monthly pension, but other say 9 weeks.  Can anybody tell me which is the correct one?

I appreciate I would then have to work out if the money from an extra 5 or 9 weeks salary makes it worthwhile to give up the 5 or 9 weeks pension.  Because of the nature of my job, the 5 weeks wouldn't be an issue but I might struggle with the 9 weeks (would involve a lot more work).

molerat

The difference is between the pre and post 2016 pensions.  Post 2016 is 1% per 9 weeks.

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

Deferring by 9 weeks on the full pension costs you £2072.25.  Once back in payment you get an extra £2.30 per week so 900 weeks to get that back.  The £2.30 only increases with CPI each year.  It is generally only considered worth deferring to avoid tax.

flaneurs_lobster

Each 9 week deferment is worth an extra 1% (as long as you're not in nick or in receipt of certain benefits).

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

TonyM19

molerat said:

The difference is between the pre and post 2016 pensions.  Post 2016 is 1% per 9 weeks.

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

Deferring by 9 weeks on the full pension costs you £2072.25.  Once back in payment you get an extra £2.30 per week so 900 weeks to get that back.  The £2.30 only increases with CPI each year.  It is generally only considered worth deferring to avoid tax.

Thank you.  I hadn't picked up on that!

Just as a follow up, if I don't defer my pension but then continue to work for 5 weeks, is it just a case of me having to pay more tax on my salary?  It wouldn't bump me into a higher tax band.  Just wondering if this is something that you can or can't do.  Can I get my state pension and my salary for a short period?

Marcon

TonyM19 said:

molerat said:

The difference is between the pre and post 2016 pensions.  Post 2016 is 1% per 9 weeks.

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

Deferring by 9 weeks on the full pension costs you £2072.25.  Once back in payment you get an extra £2.30 per week so 900 weeks to get that back.  The £2.30 only increases with CPI each year.  It is generally only considered worth deferring to avoid tax.

Thank you.  I hadn't picked up on that!

Just as a follow up, if I don't defer my pension but then continue to work for 5 weeks, is it just a case of me having to pay more tax on my salary?  It wouldn't bump me into a higher tax band.  Just wondering if this is something that you can or can't do.  Can I get my state pension and my salary for a short period?

You are taxed on your total (potentially) taxable income, so yes - you can get both state pension and salary, and for any period of time. State pension is always paid gross, so your tax code would be adjusted in due course, or you'd be sent a bill for any 'extra' tax.

TonyM19

Thanks for all the help everybody.

Cheers