Should I defer my state pension?

I’m approaching retirement age. I’ve heard about deferring my state pension, but I’m not sure what that means. What is a deferred state pension and should I defer mine?

Question asked by Mr G Howard
Are You Pension Happy?
Call us on 02084327334
I know how much my pension is worth
I know how much my pension costs
I have clear financial goals for my retirement

Answered by Michael Englefield

How does a deferred state pension work?

Deferring your state pension simply means not claiming it until after your retirement age. The rules are slightly different depending on when you retire, but essentially state pension deferral sees you put off your state pension in exchange for higher weekly payments when you do eventually decide to claim it.

While you’re in receipt of certain benefits – including income support, carer’s allowance, incapacity benefit, carer’s allowance and universal credit – you can’t build up extra state pension through deferral. Taking your pension a higher weekly payment could also reduce the amount you get from certain benefits.

How much is the deferred state pension worth?

This depends entirely on how long you defer for and when your retirement age is.

If your state pension age was on or before April 5, 2016, then you can take your deferred state pension as either higher weekly payments or a cash lump sum.

boost your retirement income by deferring your state pension

For every five weeks you defer, your state pension payments increase by 1%, equivalent to 10.4% for every full year you defer. After 12 months of deferral, you’re entitled to ask for a lump sum rather than higher monthly payments.

If there’s an annual increase in the state pension, the amount you receive could be larger.

For those due to retire on or after April 6, 2016, the option for a lump sum after 12 months of deferrals was abolished, so you’ll only get higher weekly payments for deferring your state pension.

You’ll also have to wait nine weeks, rather than five, to see any increase. For every nine weeks you defer, your state pension increases by 1%, equivalent to 5.8% for every full year.

If there’s an annual increase in the state pension, the amount you receive could be larger.

How do you defer your state pension?

It’s actually very simple to defer your state pension: you just do nothing.

This is because the state pension isn’t paid to you automatically – you have to claim it. If you want to defer your state pension, then you simply don’t claim as soon as you’re entitled to in favour of claiming higher payments later down the line.

When you do eventually come to claim your state pension, this extra sum built up through deferral is paid with the regular payment.

Should I defer the state pension or not?

Should I defer my state pension?

Whether or not you should defer your state pension is entirely dependent on your circumstances. If you stop working once you reach state pension age and have little to no other retirement income, meaning you’ll rely on the state pension to survive, then deferring your state pension is probably not advisable.

You might, however, plan to keep working past your state retirement age or have other retirement income to live off, perhaps a final salary pension scheme from your employer, an annuity or you’re in income drawdown, for example.

For those who won’t be relying on the state pension age to survive after their retirement age, deferring your state pension could boost the weekly payments when you do opt to take it.

State pension
Deferred state pension
This information does not constitute financial or other professional advice. You should consult your professional adviser or contact us directly on 02084327333 should you require financial advice. It is important to ensure any insurance policy you take out is suitable for your needs.
Start your journey today...
  Find out how a Drewberry financial adviser can help you reach your destination by making the most of your finances.
Call us on 

Frequently Asked Pensions Advice Questions

With all the changes to pensions legislation with the 2015 Budget I wanted to know whether anything has...
Is it possible to withdraw a cash lump sum from my final salary pension tax free? I’ve read a lot...
I’m thinking about getting financial advice regarding my pension but I’m worried about the...
I’ve been at my current employer for a number of years and have built up a pension entitlement,...
Need Help? Live chat now and get an instant answer from our Experts...


Our Latest Reviews
Mark France

Josh at Drewberry was extremely helpful and friendly in answering my many questions about the policy before I went ahead.

Mark Walters

Drewberry was the only website I could find that would give me an indicative Relevant Life cover quote. Victoria at Drewberry was very helpful throughout the whole application process.

Paula Cummings

They gave me good advice and weren’t pushy! I felt that I was getting what I asked for and I’m happy with the final product that I bought.

We are rated 4.9/5 based on 1966 independent client reviews.
To read more of our independent client reviews click here →
4.92 / 5 Average
1916 Reviews
Verified Buyer
Overall Rating
The whole process was a pleasure. Drewberry we're easy to deal with, polite, knowledgeable and helpful
Verified Buyer
Overall Rating
Very good, clear service would recommend to friends and family
Overall Rating
Sam Carr provided an efficient and professional service.
Verified Buyer
Overall Rating
Sam Carr provided a professional but enthusiastic service and helped make the whole process very straight forward. Goodness knows I have been through enough application forms recently. My insurance product was never going to be easy to find and I had been rejected on a number of other occasions through others ironically due to well managed common health conditions. I identified Drewberry in a last and disappointing trawl on th web to find someone that actually wanted to take on a difficult case like me. Some brokers wouldn't even consider me. When we applied for my first choice product Sam wasn't at all deterred by the long wait for my GP report or the final rejection that came back from the insurer, sadly I have become used to it. Within a day he had lined up the second choice and to my surprise he had hit the nail on the head and introduced me to the correct insurer and terms for my needs whilst nogotiating an excellent premium. I am extremely satisfied with what Sam has achieved for me and I would have no hesitation in recommending either him or Drewberry to friends, family and and business contacts. In the future, Drewberry will be my first point of contact. Many thanks!
Overall Rating
Tailored to my need and the staff gave very good service