State pension warning as thousands unaware of way to boost amount – could you get more?

Thérèse Coffey addresses state pension underpayments

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They are therefore missing out on the benefits this can provide, although deferring may not be the right decision for everyone. The benefits of deferring are a higher weekly income, or in some cases a lump sum, if one delays taking the state pension until after the state pension age, currently 66.

Awareness is not better in people approaching retirement and the level of unawareness rises to 29 percent among 55-64 year olds.

The most recent data shows that just under a million, 959,000 people, are receiving extra state pension, the lowest since 1999.

This means that the 959,000 people, or 7.7 percent of all people receiving state pension, are getting a topped up weekly income because they deferred.

This is down from a high of 11 percent in 2004 when 1.25 million pensioners received extra income.

Deferring the state pension means it won’t be received for the time it is deferred but when it is taken, the amount of income derived will be higher, provided it’s been deferred for a certain period of time.

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State pension deferment

Millions could be missing out on big benefits of deferring (Image: Getty)

Stephen Lowe, Group Communications Director for Just Group, said: “Deferring state pension is still available and is something that should be considered alongside other retirement options.

“In some circumstances it can make sense to forego some income in the short term for a higher income in later life that is guaranteed to keep up with inflation.

“Our concern is that a quarter of over-65s are unaware it is an option, raising questions about the support they are receiving when making pension decisions.”

The drop in deferrals is concentrated among women, especially those who have been affected by state pension age equalisation, which raised their state pension age from 60 to 65 to achieve gender parity.


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Mr Lowe said that because of this, the drop was of little surprise.

Furthermore, he added that the benefits of deferring have been reduced so a corresponding reduction in uptake of this is unsurprising.

The state pension age has subsequently been raised to 66 for men and women, and further changes lie ahead.

Women now comprise 73 percent of those receiving extra state pension, down from 80 percent in 2004.

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There are large benefits in deferring for anyone who reached the state pension age before April 6, 2016 who see their state pension increase by one percent for every five weeks deferred.

This adds up to 10.4 percent a year, a substantial increase.

However, as Mr Lowe pointed out, the rewards for deferring have been reduced.

This affects those reaching state pension age on or after April 6, 2016.


What is the state pension? (Image: Getty)

They will receive returns for deferring of 5.8 percent a year, which can work out to £540 extra per year so still a respectable increase.

“It reinforces the message to people approaching retirement to take up their entitlement to the free, independent and impartial guidance that the government offers through the Pension Wise service,” said Stephen Lowe.

Harry Byrne

Harry Byrne

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