The Association of British Insurers are urging people to delay taking their state pension, saying that it could be possible, under Lord Turner's proposal to increase the state retirement age, saving more than £8,037.18 in tax.
They believe that the opportunity arises where people defer taking the state pension, and take the enhanced benefit as a lump sum. Revenue rules say state pension income will be subject to income tax at the rate due to the level of income, but, by taking an enhanced benefit as a lump sum, tax is applied at the rate due before the lump sum.
Our view
We beleive the money is better in your pocket rather than the Governments - you will pay tax anyway - whether it is now or later. Just remember, all you being encouraged to do is postpone your pension until you are too old to enjoy it - and they they will take it off you to pay for care in old age.
Learn more about cares fees in old in the Care Fees Adviser.com.