Delay taking state pension

edited 30 November -1 at 1:00AM in Pensions, Annuities & Retirement Planning
2 replies 1K views
equadoequado Forumite
27 Posts
Part of the Furniture Combo Breaker
Is it true that you can decide to delay taking the state pension for some time after 65 (for a man) and that the delay can substantially increase your pension when you do decide to start taking it? ;D


  • Hi, Yes, you can delay it between 0-5 years with an increase in your weekly payment, but would it be worth it? See my posting “ To defer my state pension “ question. As no money is back dated, if you where to invest your pension straight away it might come out the same as if you deferred it. I would like to know the answer myself.
  • isasmurfisasmurf Forumite
    1.8K Posts
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Under present law you can defer your state pension for 5 years.  For each year you defer you will get a higher weekly pension of around 7.5% when you finally come to claim it.  This is due to increase to around 10.4% from April 2010. (Percentages according to

    However, there were a few proposed changes to deferring a state pension rules in the Pensions Bill which has just been passed by Parliament.

    1.  The first change was to bring forward the increased percentage in deferring your state pension from 2010, to April 2005.  I don't know if this was passed, amended or thrown out of the bill.
    2.  The second change was to remove the 5 year limitation as to how long you could defer your state pension, so you could defer indefinitely.  Again, can't find if this passed, amended or rejected.
    3.  The third change was to give you the option of instead of getting a higher weekly state pension, to take it as a lump sum.  This has been approved and is included in the Pensions Act.  The DWP say that defer for 5 years= a lump sum up to £30k. The downside to this is that the lump sum will be taxed.

    I'm not sure when these changes come in.  They were planned to come in April 2005, but they may have delayed them to April 2006 to come in with the changes in private pensions.  I'll bow to people with better knowledge than me on that.
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