State pensioners born after 1951 can get extra £694 in pension from DWP | Personal Finance | Finance
State pensioners born after 1951 can add up to £694 extra to their pension thanks to a little-known rule – but it means delaying your retirement for another year.
The Department for Work and Pensions (DWP) says you can start claiming the new State Pension once you reach State Pension age if you’re a man born on or after April 6, 1951, or a woman born on or after April 6, 1953. Anyone born before these dates will get the basic State Pension instead. But you don’t start receiving your State Pension automatically once you reach the eligible age as you have to submit a claim to the DWP for it first.
The DWP will send you a letter no later than two months before you reach State Pension age – which is currently 66 for both men and women – asking if you want to either claim your pension, or defer claiming it. If you opt to defer it, then you don’t have to do anything, as your pension will automatically be delayed until you decide to claim it – and this option can help you to boost your income.
While choosing to delay your retirement might not sound like the most appealing option, doing so will allow you to increase the amount you get, adding up to £694.20 extra to your pension pot.
If you reach State Pension age on or after April 6, 2016 then your State Pension will increase every week you defer, providing you defer for at least nine weeks. For every nine weeks you defer, your State Pension will increase by 1%, which works out as just under 5.8% for every 52 weeks, or £694.20 per year.
The new State Pension is currently worth £230.25 per week, so by opting to defer for 52 weeks, you’ll get an extra £13.35 per week – amounting to £694.20 over a full year, if you get the full rate. Of course, if there is an annual increase in the State Pension then the amount you can get could be much larger.
The DWP explains: “You do not get your State Pension automatically – you have to claim it. You should get a letter no later than 2 months before you reach State Pension age, telling you what to do. You can either claim your State Pension or delay (defer) claiming it. If you want to defer, you do not have to do anything. Your pension will automatically be deferred until you claim it.
“Deferring your State Pension could increase the payments you get when you decide to claim it. Any extra payments you get from deferring could be taxed.
“The amount of extra State Pension you could get depends on when you reach State Pension age. If you reach State Pension age on or after 6 April 2016 your State Pension will increase every week you defer, as long as you defer for at least 9 weeks.
“Your State Pension increases by the equivalent of 1% for every 9 weeks you defer. This works out as just under 5.8% for every 52 weeks. The extra amount is paid with your regular State Pension payment.”
