The Department of Work and Pensions has given details of pension deferrals, and the higher retirement age achieved through equalisation of retirement ages of men and women aged 65. The DWP have said that someone who delayed their state pension for 5 years could receive a 50% increase in their weekly pension for life. Alan Johnson, secretary of state for work and pensions, said "The Government plans to increase the choices and opportunities for individuals to stay in work by introducing more generous options for deferring the state pension".
Our view
If you do the numbers, this may not be a good deal. Based upon current State pension payments and assuming they increase at an inflation rate of 3% pa, it will take the average pensioner around 15 years to catch up and have received around the same benefit payments. In simple terms the Government are gambling on people dying before they reach 80 and those that do get past this age, whilst they will receive more money after this, they will may pay more tax as well as possible loss of, or ereduction, 'means tested' benefits.