Deferring State Pension

Ana. Yes, I realise that the children wouldn't inherit my pension as such if I didn't defer it. The part I think is unfair though concerns the funds that would have been paid to me monthly if the choice to defer wasn't taken up. Obviously when I die my pension ceases. By deferring it appears that the monies I would have been paid monthly are put aside - why should the state get it if I die?

Perhaps I just don't understand the way the state pensions work.

I agree, nanna. I'm deferring my pension as still working, but the increase is 10% p.a. (it's now 5% for more recent people reaching state retirment age, I believe). Essentially after deferring I could either claim an enhanced pension, or the state pension I would have been entitled to originally + a lump sum equivalent; if I chose the lump sum, the amount would be equivalent to 10 years increase to the orgiginal pension. So if you expect to live for more that the next 10 years you're better off taking the enhanced pension, otherwise if e.g. you have an illness you can take the lump sum and the lower pension.

Clear as mud?!

PS: I do, of course realise, that many on here will not be taking their pension until 68 anyway, but in our cases, DH was eligible at 65, and me at 61.

The point of deferring is that you take a higher pension. The calculations have changed recently, but when we did it, you gained 2% for every 5 weeks you deferred (say 10% a year for back-of-fag-packet calculations). You can lso choose to tke it as a lump sum.

This is all on gov.uk, which of course, will be up-to-date.

I found the 'inheritance' rules confusing, but it looked to me as if a spouse would get 3 months' worth (had the pension not, at that point, been taken)
So, you take a gamble! If in good health, with no need to take the income, it is generally agreed that deferring is a good plan, but working out at what point to take it is a bit of a leap!
My fag packet thought that about 68 was a good time to take it for both me & DH, so we did.

X posts

Am I mistaken then that a widow , when both were over state pension age , will get an enhanced pension when she doesn't qualify in her own right?

Iam64 spouses can inherit part of the deceased's State Pension.

Pension

But surely the whole point is that it ISN'T in your bank - because the choice has been made to continue to defer thereby earning an increased pension.

The same applies surely to your comment Greenfinch - the reason for the higher tax is that by deferring she had a higher pension.

It technically isn't inheriting a state pension though Iam64 it is inheriting a deferred amount that you would have had in YOUR bank.

No one inherits a state pension. Private pensions can be in part left to spouses and b recent law, to civil pArtners.
I'm satisfied with neither children or partners inheriting state pensions.

I absolutely agree with tanith.Also a friend discovered that when she eventually received her pension she was paying more in tax than if she had not deferred.

I'm in the same situation Oriel except there is only one of me. I'm pretty sure it's true, none of your pension passes to your children whether you defer or not. I'm not even sure that your OH would get anything. Surely as tanith says it's a gamble whether to defer, just like taking out insurance; you reap benefits by deferring but only if you win the bet!

I saw no point in deferring when who knows what is round the corner. The money is lost when you die and as we have no idea if that is tomorrow or years away I preferred to have the money in my bank.

I think the other partner does get some of it (if its a deferred amount) Ana (effectively money you would have had). But I agree I don't think children get anything.

I think this is wrong as it was money you would have had.

I didn't think children inherited any of a parent's state pension - in fact I'm sure they don't!