People approaching state pension age may not realise they have the option to defer their payments beyond the age of 67. While deferring can boost the eventual amount received, it also carries financial risks that individuals must weigh carefully.
Pensions Minister Torsten Bell addressed the issue in a parliamentary question, explaining that the Department for Work and Pensions (DWP) cannot track how many people defer their state pension or for how long. This is because the department only learns of a deferral when a claim is submitted. Bell emphasised that deciding whether to claim or defer is entirely the claimant's responsibility.
In the 2023/24 tax year, nearly 42,000 people deferred their state pension, according to Freedom of Information data obtained by Royal London. Of these, one in four postponed their pension by five years or more, and 4,400 deferred it by over a decade, as reported by Which?.
Deferring for at least nine weeks can increase the regular payments or allow a one-off lump sum. However, experts warn that individuals must consider whether they will live long enough to recoup the deferred amount. Bell noted that deferring can affect other benefits, tax liabilities, and overall financial position, and encouraged people to seek independent financial advice before making a decision.
