According to new figures from the government less people are deferring their state pension.
In fact, the last time the number of pensioners deferring was this low was 20 years ago.
Only one 12 pensioners are deferring their payments to get extra cash.
Stephen Lowe, group communications director at Just Group told the FT Adviser: “In general, deferral could work well for those in good health who are perhaps still working or who find that their state pension income pushes them into a higher tax band than necessary.”
Can you defer your state pension?
Yes, you can defer your state pension, which means delaying your payments.
In fact, doing this is very easy – you don’t need to do anything at all.
Your state pension will be automatically deferred if you don’t claim your pension, which you must do about about three months before your reach state pension age.
Why should you defer your state pension?
Experts at PensionBee told Express.co.uk: “Delaying your state pension by just a few weeks could result in you receiving a higher weekly state pension amount, or even a lump-sum payment.
“The amount you’ll qualify for depends on when you reach state pension age.”
If you reached state pension age before 6 April 2016
Your state pension will increase by around 1 per cent for every 5 weeks you defer, totalling 10.4 per cent for every full year.
For 2018/19, the basic state pension is £125.95 a week or £6,549.40 a year. If you delay taking your pension for just one year your state pension will rise to £139.05 a week, or £7,230.60 a year.
If you reached state pension age before 6 April 2016 you could qualify for a lump sum payment if you defer claiming your state pension for a minimum of 12 months.
That means you could take a lump sum of around £6,713 (including interest of 2 per cent above the Bank of England base rate), when you defer the basic state pension of £125.95 a week for a year.
If you reached state pension age after 6 April 2016
If you’ve reached state pension age relatively recently, you’ll see less of an increase as the new state pension is already higher than the basic state pension amount referenced above.
Your state pension will increase by around 1 per cent for every 9 weeks you defer, totalling 5.8 per cent for every full year.
If you receive the new state pension of £164.35 a week or £8,546.20 a year in 2018/19, your pension will rise to £173.89 a week, or £9,041.88 a year when you defer taking your pension for a year.
If you receive housing benefit or pension credit, it’s worth noting that these benefits may be affected by any additional pension income. But, if you qualify for a lump-sum payment your benefits won’t be affected.
Recent reports revealed the state pension forecast sent to many Britons was wrong.
Some had their pension overestimated by £23,000.
This is Money found that incorrect state pension forecasts were sent to pensioners.
They claim a number of people received state pension forecasts which overestimated the amount they would receive.
Now they say these people are looking at a poorer retirement than they expected.