News
February 2005
Flexible retirement – deferring your State Pension
People who choose to take their State Pension later could, after five years get a one-off payment of over £30,000 as an alternative to a higher weekly pension.
Secretary of State for Work and Pensions, Alan Johnson, said the government was keen to ensure older workers could make the choice about how and when they retire. The ability to defer would be central to this aim and would help encourage people who wanted to work past the State Pension age. The option of a lump sum payment becomes available for those who defer taking their State Pension for at least 12 months from April 2005.
The Department for Work and Pensions Five Year Strategy sets out what a person could expect to receive if they defer taking up a State Pension of £105 for anytime over one year:
- £5,646 for one year
- £11,673 for two years
- £32,306 for five years
- £77,090 for ten years
Those who choose to defer can instead receive it as an increased weekly amount added to their pension when they finally claim. Someone with a full basic State Pension at this April’s rate of £82.05 will be able to get a weekly pension of:
- £90.58 if they defer for one year
- £99.12 if they defer for two years
- £107.65 if they defer for three years
- £116.18 if they defer for four years
- £124.72 if they defer for five years
Find out more about State Pension deferral on the Department for Work and Pensions website