Analysis by retirement specialist Just Group, based on Department for Work and Pensions data, reveals that 66 per cent of adults aged 40 to 65 are unaware
State pension shock as 66 per cent don’t know they can get free £694 from DWP
Workers retiring this year can boost their annual state pension from the Department for Work and Pensions (DWP) by £694 for free.
Analysis by retirement specialist Just Group, based on Department for Work and Pensions data, reveals that 66 per cent of adults aged 40 to 65 are unaware they can delay taking the state pension beyond state pension age.
People who reach state pension age on or after 6 April 2016 are entitled to the new state pension and can benefit from a one per cent increase in their weekly payments for every nine weeks deferred. This works out as an extra 5.8 per cent income for each full year of deferral.
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With the triple lock raising the new state pension to £230.25 a week for 2025/26, delaying by one year would push weekly payments up to £243.60, a difference of £13.35. In the course of a year, that adds up to £694.20 of extra income.
Stephen Lowe, group communications director at Just Group, said: “Deferring your state pension is effectively a trade-off between receiving your full state pension payments today or an increased state pension later.
“Delaying the state pension may not work for everybody but it’s certainly an option worth knowing about and exploring in more detail for those people who don’t need the money immediately.
“If you’re still working, deferring could help reduce your income tax bill in the short term and boost your pension income in later years when it may be needed more.”
Lowe added: “The decision requires careful thought. It takes around 17 years to break even if you defer the state pension for a year so health and life expectancy are key considerations when weighing up whether you could benefit.
“Currently, any extra income accrued through deferring the state pension offers protection against inflation – a valuable safeguard for those planning for a long retirement.”
“Anyone who is unsure of their options can find further guidance from a range of sources,” Lowe said. “The government’s free and impartial Pension Wise service is a good place to start while regulated financial advice remains the gold-standard.”