State pensioners who have already claimed their state pension from the Department for Work and Pensions (DWP) have been reminded that it is not too late to defer payments, potentially gaining an extra £728 per year.
How Deferral Works
The DWP allows pensioners to pause their state pension payments under its rules. By deferring, you can earn an extra 1% for every nine weeks you delay, which works out to approximately 5.8% per year. On current figures, a one-year deferral adds £13.99 per week, or £728 annually, for life.
Expert Advice
Writing to AJ Bell's Charlene Young, a 69-year-old retiree asked if it was possible to defer further after already starting to claim. Ms Young replied: "The short answer is yes, once you've already claimed the state pension it is possible to pause it, but you can normally only do this once. You'll need to contact the Pension Service for help."
Financial guru Martin Lewis has championed deferral benefits. He said: "Defer your state pension, and the maths works out that if you live longer than typical life expectancy, you'll gain; if you live less, you'll lose. If you're in great health with a history of family longevity, deferring could be a winner."
Tax Considerations
Lewis added: "Otherwise the real issue is tax – if you're earning or have a decent income now, but'll pay tax at a lower rate later on, then deferring can be very worthwhile." The current state pension age is 66, with those born before June 1960 eligible to claim.
