The state pension age has been rising in recent years, meaning many pensioners reach their state pension age at different times. But, once an eligible person has reached their required age, they can start getting the monthly amount. The payment is not automatically made, but it instead needs to be claimed. Otherwise, the individual’s state pension will be deferred.

Delaying the payments may increase the payments a person gets when they do decide to claim it.

For a person who reached state pension age on or after April 6, 2016, their state pension will rise for every week it is deferred, provided this is for at least nine weeks.

The increase in this situation is the equivalent of one per cent for every nine weeks it is deferred.

This works out at just under 5.8 per cent for every 52 weeks, and later, when it is claimed, it can be paid with one’s regular state pension payment.

Should a person have reached state pension age before April 6, 2016, then different rules apply.

This means that the extra amount can be taken either as higher weekly payments, or as a one-off lump sum.

The former will see increases for every week the payment is deferred, provided this is for at least five weeks.

The increase is the equivalent of one per cent for every five weeks deferred, or 10.4 per cent for every 52 weeks.

On the other hand, those following these rules can opt for for a one-off lump sum payment – if the state pension was deferred for at least 12 months in a row.

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This amount will include the interest of two per cent above the Band of England base rate, the government website explains.

While it’s down to personal preference as to whether or not one defers their state pension or not, one man has shared his delight at finding out his state pension had been automatically deferred.

Peter Williams, 76, was struggling to make ends meet on two workplace pensions, worth £234 and £275 per month.

The pensioner reached his state pension age of 65 back in 2008, and had applied for his state pension by post.

But, despite filling out the forms, he didn’t hear from the Pensions Service on the matter, and assumed that opting out of the State Earnings Related Pension Scheme (SERPS) had meant he wasn’t entitled to receive the state pension.

With just a total of £500 per month from private pension income over the subsequent 11 years, Mr Williams spent his life savings and inheritance in order to top-up his income.

In need of some additional cash, the pensioner looked into equity release for his £240,000 property.

When an adviser at the firm Responsible Life paid him a visit, Mr Williams was asked about his state pension – a questions which is part of the company’s routine benefits check.

It was then that Mr Williams found out via the state pension claim line that his basic state pension had been deferred – and that he could receive £274 per week starting immediately.

On top of that, the retiree could claim a lump sum payment of £132,800, for all the years his state pension was not claimed.

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He said: “Words cannot describe the elation I feel. Graeme’s [Donegani, an adviser at the firm] open-handed approach to my situation has changed my life and provided me with a very positive future.

“I no longer need to release equity in my property and will be able to live comfortably on my pensions.”

Steve Wilkie, Managing Director of Responsible Life, said: “It’s no exaggeration to say this money will change Peter’s life.

“It just goes to show all retirees need to make sure what their entitlements are, and if you make enquiries with the tax office no news isn’t necessarily bad news.

“This unexpected windfall also means he doesn’t need to release equity from his house and we couldn’t be happier for him.”

A Department of Work and Pensions (DWP) spokesperson said: “We want everyone to be able to claim what they are entitled to and have a wide range of channels where people can get information and advice.”

Steve Webb, director of policy at insurer Royal London, told This is Money: “If you are over pension age and have not received anything, you should call the Pension Service.

“If it does not hear back, the Pension Service assumes that taxpayers want to defer their state pension. But the letter may not have reached its destination.”

READ MORE: State pension: This trick can help you increase your monthly pension – what can you do?



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