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State pension age: How deferring payment before claiming state pension can increase amount | Personal Finance | Finance

Pensioners will not receive their state pension automatically, it will need to be claimed. According to gov.uk, retirees should get a letter no later than two months before they reach state pension age with instructions.

There are four ways to claim the new state pension. It can be claimed online, over the phone, by downloading the state pension claim form and sending it to the local pension centre, or pensioners can contact an international pension centre if they are claiming state pension while retiring abroad.

To claim online, claimants will need the date of their most recent marriage, civil partnership or divorce, the dates of any time spent living or working abroad and their personal or joint bank or building society details.

Once those details are ready, claimants can follow the instructions set out on the government website.

They can also call a specific line to claim their pension or provide technical help with the online service.

READ MORE: Retirement: Early retirees ‘3 times more likely to be forced to stop working than opt to’

However, claiming the state pension as soon as qualifying age is reached may not be the best option.

For those who are not ready, or do not wish to retire, they can defer your claim. Deferring the state pension may be a viable option, as the pension will increase for every week deferred, so long as it is deferred for a minimum of nine weeks.

The new state pension will increase by the equivalent of one percent for every nine weeks you defer. This works out at just under 5.8 percent for every 52 weeks.

So, for example, those who get the new full state pension payout of £168.60 who decide to defer for 52 weeks will get an extra £9.74 a week.

This also assumes that there will be no annual increase in the state pension. If there is an annual increase, the amount received could be higher.

The process for eventually claiming a deferred state pension is the same as the four methods listed previously.

For those who move abroad, the rules for deferring the state pension remain the same so long as they move to a country within the European Economic Area, Switzerland or a country that the UK has a social security agreement with (except for Canada or New Zealand).

Those who do move to a country that isn’t in that list will still get the extra payment but it will not increase or decrease over time.

Those unsure of what the best retirement options are, should seek help for financial or pension planning.

There are free resources available such as the Money Advice Service, Pension Advisory Service and Pension Wise which provide guidance on retirement savings options.

For those who would prefer to use an independent financial advisor, the government recommends using websites such as unbiased.co.uk or personal finance society to find an advisor.


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