State pension payments can be increased but some Britons will not be eligible for boost

Guy Opperman quizzed on state pension underpayments

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A person may well decide they want to claim the state pension right away and begin receiving it at state pension age. However, some may instead opt to defer the payment.

Also referred to as delaying the state pension, this is done by not taking action.

As the state pension needs to be claimed, deferring is automatic until the person claims it.

Doing so may mean the state pension payments will rise when it is claimed.

GOV.UK explains: “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.”

It is important to be aware that some people are not eligible.

Those getting certain benefits cannot get extra state pension.

Furthermore, “deferring can also affect how much you can get in benefits,” warns GOV.UK.

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“You must tell the Pension Service if you’re on benefits and you want to defer.”

It’s not possible to build up extra state pension during any period one gets:

  • Income Support
  • Pension Credit
  • Employment and Support Allowance (income-related)
  • Jobseeker’s Allowance (income-based)
  • Universal Credit
  • Carer’s Allowance
  • Incapacity Benefit
  • Severe Disablement Allowance
  • Widow’s Pension
  • Widowed Parent’s Allowance
  • Unemployability Supplement.

Additionally, a person can’t build up extra state pension during any period their partner gets:

You cannot build up extra State Pension during any period your partner gets:

  • Income Support
  • Pension Credit
  • Universal Credit
  • Employment and Support Allowance (income-related)
  • Jobseeker’s Allowance (income-related).

The amount of extra state pension a person could get by deferring depends on when they reach state pension age.

Reaching state pension age on or after April 6, 2016

For those in this situation, the state pension will increase each week it is deferred, as long as this is deferred for at least nine weeks.

It will rise by one percent for every nine weeks deferred, working out at just under 5.8 percent for every 52 weeks.

This extra amount will then be paid with the regular state pension payment when it is eventually claimed.

Reaching state pension age before April 6, 2016

These people will usually have the option to take the extra state pension as either higher weekly payments or a one-off lump sum.

Higher weekly payments

As long as it is deferred for five weeks, the state pension will increase every week deferred.

It will rise by one percent for every five weeks deferred, working out as 10.4 percent for every 52 weeks, with the extra amount paid with the regular state pension payment.

Lump sum payment

Those who have deferred the state pension for at least 12 months in a row could opt to get a one-off lump sum payment.

This will include interest of two percent above the Bank of England Base Rate.

It’s also important to be aware for those in prison, extra state pension can’t be built up until they leave prison.

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