Deferring State Pension and what you will get
You don’t get your State Pension automatically, you have to claim it. You should get a letter no later than two months before you reach State Pension age, telling you what to do. You can either claim your State Pension or delay (defer) claiming it.
What you need to do to defer your State Pension
If you want to defer, you do not have to do anything. Your pension will automatically be deferred until you claim it.
Deferring your State Pension could increase the payments you get when you decide to claim it.
Any extra payments you get from deferring could be taxed.
Deferring if you are on benefits
You cannot get extra State Pension if you get certain benefits. Deferring can also affect how much you can get in benefits.
You must tell the Northern Ireland Pension Centre if you're on benefits and you want to defer
What you will get
The amount of extra State Pension you could get depends on when you reach State Pension age.
Reaching State Pension age on or after 6 April 2016
Your State Pension will increase every week you defer, as long as you defer for at least nine weeks.
Your State Pension increases by the equivalent of one per cent for every nine weeks you defer. This works out as just under 5.8 per cent for every 52 weeks.
The extra amount is paid with your regular State Pension payment.
Example: You get £230.25 a week (the full new State Pension).
By deferring for 52 weeks, you’ll get an extra £13.35 a week (just under 5.8 per cent of £230.25).
This example assumes there is no annual increase in the State Pension. If there is an annual increase, the amount you get could be larger.
Reached State Pension age before 6 April 2016
You can take your extra State Pension as either:
- higher weekly payments
or
- a one-off lump sum
When you claim your deferred State Pension, you’ll get a letter asking how you want to take your extra pension. You’ll have three months from receiving that letter to decide.
Higher weekly payments
Your State Pension will increase every week you defer, as long as you defer for at least five weeks.
Time spent in prison or when you or your partner get certain benefits does not count towards the 5 weeks.
Your State Pension increases by the equivalent of one per cent for every five weeks you defer. This works out as 10.4 per cent for every 52 weeks.
The extra amount is paid with your regular State Pension payment.
Example: You get £176.45 a week (the full basic State Pension).
By deferring for 52 weeks, you’ll get an extra £18.35 a week (10.4 per cent of £176.45).
This example assumes there is no annual increase in the State Pension. If there is an annual increase, the amount you get could be larger.
Lump sum payment
You can get a one-off lump sum payment if you defer claiming your State Pension for at least 12 months in a row. This will include interest of two per cent above the Bank of England base rate.
You’ll be taxed at your current rate on your lump sum payment. For example, if you’re a basic rate taxpayer your lump sum will be taxed at 20 per cent.
If you are in prison
You won’t build up extra State Pension until you leave prison.
Annual increases
After you claim your State Pension, the extra amount you get because you deferred will usually increase each year based on the Consumer Price Index.
It won’t increase for some people who live abroad. Read more in the section below ‘Deferring State Pension if you move abroad’.
Get help
Contact the Northern Ireland Pension Centre State Pension claim line if you need help. For more information go to:
Deferring State Pension if you move abroad
If you move to any of the counties in this list, the rules for deferring your State Pension are the same as in the UK.
- European Economic Area (EEA) countries (GOV.UK)
- Switzerland
- a country with which the UK has a social security agreement (GOV.UK) (except Canada or New Zealand)
If you move to a country that is not in the list, the extra payment you get will stay the same. It won’t go up or down over time.
Reaching State Pension age on or after 6 April 2016
If you move to a country that is not in the list, your extra payment will be based on the State Pension you’re owed at whichever is later of:
- the date you reach State Pension age
- the date you move abroad
Contact the International Pension Centre if you need help working out what you could get.