Calculate Increased Pension When Postpone Taking UK State Pension
Published / Last Updated on 25/03/2025
You Must Claim Your UK State Pension
- You should get a letter around 2-3 months before you reach your State Pension age advising you to claim your state pension.
- You do not get your State Pension automatically; it must be claimed.
- If you do not claim it, you do not have to do anything, and it will automatically be deferred until you claim it.
How Much is State Pension Increased By If I Defer?
- Your deferred UK State Pension increases each week it is deferred.
- The minimum deferred period is 9 weeks before you get any increase.
- Your deferred UK State Pension increases by approximately 1% for every 9 weeks you defer (it used to be 5 weeks).
- This works out at approximately a 5.8% increase if you defer for 52 weeks (1 year).
- The extra amount is paid when you start claiming and drawing your state pension.
Options Before 6 April 2016 - Lump Sum or Bigger Weekly Pension
Before April 2016, you could claim your extra State Pension as either:
- Higher weekly payments.
- A one-off lump sum payment.
Options After 6 April 2016 - Bigger Weekly Pension Only
- If you reach state pension age after 6 April 2016, the option to take a one-off lump sum payment was withdrawn.
- You can now only take the extra amount by drawing higher weekly payments.
How Long to Break Even? We Did Calculations a Couple of Years Ago
In summary, we found that if State Pension is Age 67 and you defer:
- For 1 year until age 68 = break even Age 82
- For 2 years until age 69 = break even Age 83
But these break-even points did not allow for taxation e.g., if you defer because you are working and paying 40% income tax, your state pension would also be hit by 40% but by deferring for when you stop working and perhaps only paying 20% income taxes would bring the break even point closer by say 6-8 years.
When Do You Not Get Extra Pension for Deferring?
1. When you spend time in prison.
2. When you are claiming the following benefits:
- Income Support
- Pension Credit
- Employment and Support Allowance (income-related)
- Jobseeker’s Allowance (income-based)
- Universal Credit
- Carer’s Allowance
- Carer Support Payment
- Incapacity Benefit
- Severe Disablement Allowance
- Widow’s Pension
- Widowed Parent’s Allowance
- Unemployability Supplement
3. When your partner is claiming the following benefits:
- Income Support
- Pension Credit
- Universal Credit
- Employment and Support Allowance (income-related)
- Jobseeker’s Allowance (income-related)
