Please note that this website has a UK government accesskeys system.
If you put off claiming your State Pension, you can earn either extra State Pension or a one-off taxable lump sum payment. Knowing your options helps you make better decisions when you reach State Pension age.
You don’t have to stop working or claim your State Pension when you reach State Pension age. You can put off claiming your State Pension when you reach State Pension age. You can also choose to stop claiming it after having claimed it for a period. Since the State Pension was introduced, people have been able to earn extra State Pension in this way.
Your State Pension age is set by law. You should be aware that the government has announced new proposals for increasing State Pension age. This would mean that from December 2018 the State Pension age for both men and women would start to increase to reach 66 by April 2020. Women’s State Pension age would increase more quickly to 65 between April 2016 and November 2018. Any change to the timetable needs the approval of Parliament. The government is also considering the timetable for future increases to the State Pension age from 66 to 68.
The age at which you retire from employment does not affect when you can start getting your State Pension after you reach State Pension age.
Now that people are living longer and healthier lives, it makes sense to make it easier to work flexibly after State Pension age.
Since 6 April 2005, if you put off claiming your State Pension, (whether you are working or not) you can choose one of the following options when you do claim.
If you put off claiming your State Pension for at least five weeks you can earn an increase to your State Pension of 1 per cent for every five weeks you put off claiming.
Once you claim your State Pension, any extra State Pension you have built up will usually increase each year. For 2011 this will be in line with price inflation.
If you put off claiming your State Pension continuously for at least 12 months, which must all have fallen after 5 April 2005, you can choose to receive a one-off lump sum payment and your State Pension paid at the normal rate.
From 6 April 2010, it is no longer possible to get a new increase of your State Pension for another adult. This is an ‘adult dependency increase’. It is an increase in your State Pension for a wife, husband or someone who is looking after your children, if he or she is considered to be financially dependent on you.
If you were already entitled to this increase on 5 April 2010, you will be able to keep it until you no longer meet the conditions for the increase or until 5 April 2020, whichever is first.
If you started receiving State Pension before April 2005, you can choose to cancel your claim to build up entitlement to extra State Pension or a lump sum payment.
You can cancel your claim in this way only once. To qualify, you must be normally resident in the UK, in the European Economic Area or Switzerland.
If you have not claimed your State Pension, when you finally do claim it, you will get an increase for the period up to 6 April 2005. This is based on the old rate of extra State Pension (about 7.5 per cent for a whole year), provided the period is five years or less. For the period falling after that date there is no maximum time limit. You will be eligible for either:
If you have not yet claimed your State Pension but you want to put off taking it up, you do not need to do anything. But you will need to tell The Pension Service what you want to do if you are already claiming another social security benefit.
If you are already getting your State Pension, but would like to stop claiming it to earn extra State Pension or a lump sum payment, you should contact your pension centre. The telephone number will be on any letters you have received from your pension centre.
See an example of how State Pension deferral can provide you with options when approaching State Pension age and how it can affect your income.
If you live abroad and have not yet claimed your State Pension, then when you reach State Pension age you may be able to put off claiming it.
If you live outside the UK and have already claimed your State Pension you will not normally be able to stop claiming it.
To stop claiming your State Pension you must live in the UK or in one of the following countries:
Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, The Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland.
You must also be one of the following:
Facebook
Twitter
Google Buzz
StumbleUpon
Delicious
Reddit