Britons are being urged to consider an option to boost their state pension payments by £954 which many working-age people remain unaware of, according to new research.
Analysis of Department for Work and Pensions (DWP) data from Just Group found that 66 per cent of adults aged 40-65 are not aware that they can delay taking their retirement payments past the official state pension age.
As it stands, the state pension age is 66 years old but this will rise to 67 for millions of retirees next year with the Government reportedly floating an earlier-than-expected hike to 68.
Based on Just Group’s analysis, 34 per cent of Britons did know they could delay, a third were unsure what the impact of deferring would be on their regular payments, and an extra eight per cent either thought they would receive the same amount or less.
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Britons are being told to be “careful” when it comes to state pension deferral
Notably, Just Group highlighted that there are only low levels of people deferring the state pension, with only one in 10 adults aged 66-75 committing to delaying accessing payments.
When Britons sked why they wanted to defer, the majority admitted it was because they did not immediately need the financial support upon reaching the state pension age or they did wanted to bolster their retirement income long-term.
Furthermore, around a fifth of individuals polled by Just Group also opted to wait until they had stopped working full-time before they chose to claim the state pension.
As it stands, people who hit the state pension age on or after April 6 2016 get the new state pension, and can receive a one per cent hike in their weekly payments for every nine weeks that payments are deferred.
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This is the equivalent to around 5.8 per cent extra income for every full year deferred. Taking into account the triple, which sees state pension payment rates rise annually by the highest of inflation, wages of 2.5 per cent, this means Britons could be in line for a significant boost.
Under the triple lock, the new state pension is sitting at £230.25 in 2025, which means those who defer payments this financial year will benefit from an additional £13.35 weekly boost.
If this is carried out, this will be the equivalent to an extra £694.20 windfall in retirement income, as well as any inflation-linked increases.
In comparison, individuals who reached the state pension age before April 6 2016 and opted to defer are treated more generously.
This group are rewarded an extra one per cent income for every five weeks deferred, which is equal to a yearly rate rise of 10.4 per cent or £954.20.
These state pension payments can be taken either as extra income or a lump sum.
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Stephen Lowe, Just Group’s communications director, explained: “Defering your state pension is effectively a trade-off between receiving your full state pension payments today or an increased state pension later.
“Delaying the state pension may not work for everybody but it’s certainly an option worth knowing about and exploring in more detail for those people who don’t need the money immediately.”
According to the retirement analyst, Britons should be aware that any move to defer must be taken with “careful thought”, with health and life expectancy “key considerations”.
Lowe added: “Anyone unsure of their options can find further guidance from a range of sources.”