State pensioners have been handed a guide on how to “turbo boost” the state pension pay rise next year.
State pensioners having DWP payments ‘turbocharged’ with free £741 increase
State pensioners will see their Department for Work and Pensions (DWP) payments “turbo charged” – all thanks to a deferral. State pensioners have been handed a guide on how to “turbo boost” the state pension pay rise next year.
When it comes to deferring, you get an extra 1% for every nine weeks you wait to claim, and those who wait for a full year to claim could boost their payout by 5.8%.
The current rate is £230 a week for New State Pensioners, who are born after 1951 if they’re men, or born after 1953 if they’re women. The state pension is worth £11,973 a year to younger retirees.
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But deferring for a full year will see older people in the UK handed an extra £13.35 a week.
With next year’s Triple Lock hike forecast to be greater than expected, it is hoped the rate of the New State Pension could rise to over £241 a week.
This means deferring could take the payment increase to £14 a week. Quilter reckons retirees could thus see weekly payments from the Labour Party government and DWP rise to £255.29 a week – or £13,275.08 a year.
That’s a big increase – or £741 – on the standard rate of £12,534.60 next year. Tom Selby, director of public policy at AJ Bell, said this “simply won’t be an option” for some nearing retirement as they need state pension income as soon as possible.
He added: “While for others it might depend on their health and lifestyle. But if you have other sources of income and are in good health then it could be worth considering.”
Adam Cole, retirement specialist at Quilter also said there are situations “where this makes sense”.
He explained: “The estate may only be able to claim up to three months of arrears.
“And because you must actively claim the new state pension, deferral happens by default if you don’t initiate that claim.”