People can choose to defer claiming their State Pension when they reach retirement age.
Many people approaching the official age of retirement this year may not be aware they could increase future State Pension payments by choosing not to claim the contributory benefit. Deferring your State Pension could add an extra £660 each year on to the annual payments, however, consumer champion Martin Lewis says it’s something that might only benefit certain groups of people.
There’s a handy step-by-step guide on deferring the State Pension on the MoneySavingexpert.com website here. Those who are eligible for the New State Pension can benefit from a one per cent increase in their weekly State Pension for every nine weeks they delay claiming the payment, equivalent to nearly 5.8 per cent extra income for every full year deferred.
These retirees receive an extra one per cent State Pension income for every five weeks deferred, equal to an annual rise of 10.4 per cent or £916.66, which can be taken either as extra income or a lump sum. Over the 2024/25 financial year, the full New State Pension will be worth £11,502, leaving just £1,068 before the personal tax threshold is exceeded, so anyone with additional income of £89 or more per week - on top of State Pension - may receive a tax bill the following year.
State Pension Pensions Retirement Personal Finance
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