This woman has doubled her state pension to £ 300 per week | Personal Finances | Finance



A lot of people assume they are forced to start collecting their state pension from age 66, but if you delay you could get a lot more money when you finally get it. So should you consider postponing your retirement?

Deferring the pension is the process of delaying the age at which you start receiving state pension, in exchange for higher income later.

It’s even possible to defer state pension payments after you start claiming them, although you can only do this once.

Sandra Wrench, 69, of Bedford, said the postponement of the pension made a big difference to her quality of life in retirement.

Instead of earning around £ 150 per week, she now receives around £ 310 per week, a figure which includes additional state pension payments.

When Sandra turned 60, almost 10 years ago, she decided to continue working part-time but deferred payment of her state pension.

She knows the scheme inside out, having worked for the Department of Work and Pensions for years, including 18 years specializing in state pensions.

Her experience convinced her of the benefits of deferral, knowing that she was accumulating her rights.

Sandra also decided to fill the gaps in her National Insurance (NI) record by making voluntary Class 3 NI contributions.

She ended up delaying the payment of her state pension for seven and a half years. Today she earns £ 16,000 a year.

Those who retire on the old basic state pension receive a maximum of £ 137.60 per week, worth £ 7,155 per year, plus any additional state pension they may have accumulated . Those retiring under the new state pension receive a maximum of £ 179.60 per week, or £ 9,339 one year.

Sandra’s state pension income includes the additional pension she had accrued under the old scheme, which was phased out on April 6, 2016.

She is now using her expertise to help her friends and family claim their maximum state pension entitlement and is urging women to get a retirement forecast on the website and fill in any gaps in their NI record. . “The sooner you figure out what you’re going to get in retirement, the more options you have to increase your state pension,” she said.

READ MORE: Best countries for state pension payments ranked – how did the UK fare?

One of the benefits of deferring your state pension is that you get more income when you finally get it.

Many of those who work beyond the age of 66 risk being pushed into a higher income tax bracket if they simultaneously receive a state pension. Postponing until you’ve stopped working or your income is lower can lower the bill.

Despite the potential benefits, only one in ten people postpone their state pension, said Stephen Lowe, director of Just Group retirement advisers.

Of those who postpone, about half do so for one or two years, a quarter for three years, and the rest for longer.

The minimum deferral period is five weeks.

Deferral won’t be for everyone, but it’s important to know that you have this option, in case it suits you.

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Those who retired under the old state pension, like Sandra, will get a better deal by deferring.

Their pension increases by 10.4% for each year carried over, which translates to an additional £ 744.12 per year. It can also be considered as a taxable lump sum.

There is no lump sum option under the new state pension and the increase is only 5.8%, Lowe said. “It’s worth £ 10.42 per week for a year late, or £ 541.67 per year. It is still worth taking into consideration. “

The downside to deferral is that you will sacrifice state pension income while you wait. “Typically it takes about 10 years to recover this under the old system, but 17 years under the new one,” Lowe added.

The postponement makes more sense if you are in good health because your life expectancy is longer, said Andrew Tully, technical director of Canada Life. “In practice, most people need their full state pension as soon as they are entitled to it. “


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