Is it possible for you to improve your projected state pension? How can Britons increase their income by hundreds of pounds?
DELAYING TAKING THE STATE PENSION CAN HELP PEOPLE PLAN FOR THEIR RETIREMENT – AND THE RESULT CAN BE MASSIVE.
People do not have to do anything to defer the payment because they do not automatically receive the state pension and must actively seek it. Rather, they can simply leave the state pension alone and it will rise over time, as long as they delay it for a specified period of time.
Around two months before they reach the age when they can claim their state pension, they should receive a letter outlining their options.
When someone decides to postpone claiming their state pension, the length of time they wait determines the returns they will receive.
For pension deferrals, there is a cut-off point between two systems. People who attained state pension age (SPA) prior to April 6, 2016 are handled differently than those who were born on or after that day.
Those in the former group who reach SPA before April 6, 2016, will get a boost in their state pension for every week deferred, as long as the deferral lasts at least five weeks.
For every five weeks deferred, their state pension will increase by a significant one percent.
This equates to a 10.4% annual increase.
Deferring the state pension by a year will result in an extra £14.31 per week for individuals eligible to the full basic state pension of £137.60 per week when they opt to collect their state pension.
The triple lock guarantees annual increases, which means there will be additional increases.
Those born on or after April 6, 2016, who are in the later of the two aforementioned categories, will see their state pension increase every week if they defer for at least nine weeks.
The state pension then grows by one percent for every nine weeks deferred, making it significantly less generous but still providing a decent 5.8% annual increase.
Deferring for a year will entitle people to an extra £10.42 per week if they are receiving the full new state pension of £179.60 per week.
People’s eligibility for the full state pension is determined by their National Insurance (NI) record.
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