Deferring Taking The State Pension

[mikey4444]

Is there anybody out there, that has decided to defer taking the State Pension, and why ?

[furrypusscat]

I deferred mine for 3 years as at the time I didn't need the income. By doing so I received 10% extra annual pension for each year I deferred. I could have taken a lump sum and my normal pension or have the extra amount saved added on to my pension. I decided on the higher pension. However, since 2016 the interest has now halved to 5% so the deal isn't as lucrative.

[furrypusscat]

See my post here:

http://www.theanswerbank.co.uk/Business-and-Finance/Question1370486.html

[mikey4444]

furrypusscat...from the following link, that deferment parentage is now 5.8%

https://www.gov.uk/deferring-state-pension/what-you-get

But by deferring your State Pension, you may now miss out on £155:65 per week / £8093:80 per year. On the calculation given in the above link, a gain of £468 per year is obtained by deferment.

But in deferring, you would miss on £8093 per year, which you would only get back by living a very long time ! State Pensions are not like works pensions....there is no "widows pension" after you die.....once you are dead, the State Pension is dead as well.

So.... if you deferred for 5 years, and then died, be fore claiming the pension, all that £8093 per year is lost for ever !

[mikey4444]

furrypusscat....just saw your post of 10:07 !

It doesn't seem to make any sense to lose a possible income of £8093:80 every year, unless you know that you will live until that telegram comes from Betty.

[furrypusscat]

Hi mikey. Due to my pension age, I come under the old rules. I would not have been able to get the Pension Credit top up due to my personal circumstances so my pension would have been £119 at todays amount, I think it was £115 when I took it but with the extra, I now get around £186 so I am happy at that. It was a difficult decision to make but I still think I chose the right one.
My OH who was 65 in May comes under the new rules and gets the new rate of £155.65.

[EDDIE51]

All the information I have seen on this, and I did a lot of research, says take the pension as soon as possible and if you do not need it have it paid into a savings account. As you say losing a year's pension payment is not going to be recouped by the extra 5 , 10 or what ever % it is increased by unless you are going to live to over 95 .
I was just 22 days too young to get the new pension rate.

[furrypusscat]

Surviving another 8 years after drawing my pension, 60 yrs 9 months when I could have taken it but left it until I was 63 yrs 9 months, only makes it that I will have to live until I am almost 72 to break even. I am almost 66 now so I am hoping to survive that long and longer, fingers crossed, then I will be gaining. Apart from creeking joints I am quite fit and active. It all depends on your fitness as to whether to take a gamble and as I said, the % has halved now so not as good value.

[ubasses]

Like furrypussycat I deferred mine under the old system 15 months ago, but have not yet decided when to take it or whether to have increased pension or receive the lump sum and standard pension. The other advantage on the old system which is not on the new is that all the deferred pension can be inherited by a spouse/civil partner.

[woofgang]

I clam next year and considered deferring but decided not to. My reasoning is simple. Government on both sides have changed the rules on me twice, extending the time until I can claim and removing my right to claim based on my late husband’s contributions. I have no faith in government of any persuasion not changing the rules again and refusing to pay deferred pension. If its in my hot little hands they can’t get it back.

[furrypusscat]

If it was me now, with the age of claiming the state pension having risen plus only getting half the amount I got on deferral and of course the new higher pension rate, I would have to think carefully as to what decision I would make. EDDIE does have a point. If you did defer, to opt for the lump sum, if rules are still the same, I believe deferral had to be for a minimum of 12 months. Any less the lump sum wasn't an option you just got a higher pension.

[ubasses]

I agree furrypussycat, not sure what my decision would be now if I was under the new system. The biggest thing for us was the ability to inherit each others deferred pension, as it would be completely lost under the new system especially as we have both deferred, and of course it is better to use some savings if we have to, they are getting so little interest and the 10% is so good.

[mikey4444]

Ubasses......every year you don't take that pension, the money is lost....you won't be able to get it back again. Take the pension as soon as you can, and use it !