State Pension

Bea0802

I did the same as Chewbacca. Also, I was offered a lump sum or to add to my pension. After doing my sums I worked out I’d be better off adding to my pension. My financial advisor agreed.

Was your state pension age before 2016? If it was, that's why. The rules have changed since then. Are you talking about the state pension or a private pension? They operate completely differently.

It really isn't worth deferring for the vast majority of people.

Ginpin

My husband turned 66 2 days ago. He looked online about a month ago. He is going to get a small amount for August and then his proper amount in September.
Can't understand why he is not getting more for August as his birthday was 3rd. ??
He is not getting as much state pension as you might imagine, given his working life, because as a teacher he was contracted out by the Teacherspensions scheme.
It all changed in 2016 but he retired in 2015.

The day of the month he is paid his state pension depends on his National Insurance number. The first payment is backdated from the payment date to the date of 66th birthday. It will be paid every four weeks after that.

JenniferEccles

Just as a sideline, have you considered deferring your pension for a few years?
Unless the rules have changed recently, it is certainly worth considering if you could manage without it as it increases for every year you defer.
Then when you do claim it, you will get the increased rate for the rest of your life.
With the benefit of hindsight, I wish I had waited as we don’t actually need it for day to day living.

I was too excited though at the thought of that money magically appearing in my bank account each month!

I'd heard about deferring your pension, but I also read that, heaven forbid, if anything happened to you before you started claiming the backdated pension, your family / estate wouldn't see a penny of it! So when my time comes I think I will just claim it.

Edge26….. you can contact them 4 months before your 66th birthday.

Please don’t defer your pension. Spoke with the HMRC recently about this. And they confirmed that…… one year of not getting your pension takes (if I remember correctly ) 13 years to recoup that one year. It’s just not worth it and this was the departments own words.

My husband turned 66 2 days ago. He looked online about a month ago. He is going to get a small amount for August and then his proper amount in September.
Can't understand why he is not getting more for August as his birthday was 3rd. ??
He is not getting as much state pension as you might imagine, given his working life, because as a teacher he was contracted out by the Teacherspensions scheme.
It all changed in 2016 but he retired in 2015.

I am due my pension in 11 months, how soon before do you have to start the process of claiming it?

I did the same as Chewbacca. Also, I was offered a lump sum or to add to my pension. After doing my sums I worked out I’d be better off adding to my pension. My financial advisor agreed.

I claimed mine lasy year, i do have a smart phone but did not need it. I rang up then i went online the form was so easy. I didnt need any proof of id. Having said that im a widow so was claiming widows pension so they just changed it over. The only difference being that its now monthly and my wp was 2 weeklý.
Keep trying, my friend got a lovely lump sum after having hers delayed by mix ups. Beware you are taxed on it.

That's what I worked out too jocork.

Chewbacca

Yes I can see where you're coming from growstuff but, in my circumstances, I'd have paid a hell of a lot of tax if I'd claimed my SRP whilst I was working. Horses for courses.

That's what I said. You would have paid (presumably) 40% tax on your state pension, but possibly only 20% after giving up work. It's very possible you're still out of pocket, although it depends whether you reached state pension age before or after 2016.

A friend of mine has just started claiming state pension. He intends to carry on working to at least 70 and pays 40% tax. We sat down and worked it all out. Even though he will lose 40% of his pension in tax, he's still better off claiming it now, unless he can guarantee living to 100, which obviously he can't.

I phoned to make sure they'd received my claim which I believe I'd made by post a few months earlier. Mind you, I had to hang on for a good half hour and was on the point of giving up when a human being finally answered but it's worth persevering. So, do keep on - it's due to you after all, in more ways than one.

JenniferEccles

Just as a sideline, have you considered deferring your pension for a few years?
Unless the rules have changed recently, it is certainly worth considering if you could manage without it as it increases for every year you defer.
Then when you do claim it, you will get the increased rate for the rest of your life.
With the benefit of hindsight, I wish I had waited as we don’t actually need it for day to day living.

I was too excited though at the thought of that money magically appearing in my bank account each month!

The additional amount you got for deferring was greater with the old pension which was less generous overall than the new pension. I think I worked out I'd have to live nearly another 20 years to be better off as although it increases you miss out on all the payments while you defer. Not that I had a choice as I couldn't afford to retire on my other pensions and was desperate to leave my job. I did work a little beyond 66 but claimed my pension as soon as I could. They only add for each full 9 weeks you work beyond your retirement age and I needed to leave after about 7 weeks so no use to me. If I live to a ripe old age I may regret leaving when I did but that will be a bonus in other ways as long as I stay well and independent. Hopefully downsizing will give me far more than I could have received in extra pension.

Actually just worked it out again and it takes 17.24 years to recoup a year's deferred pension at 5.8%. So if I'd deferred for a year I'd have to live to 83+ to be better off. Since my DM lived to 81 that seems about even odds to me!

Yes I can see where you're coming from growstuff but, in my circumstances, I'd have paid a hell of a lot of tax if I'd claimed my SRP whilst I was working. Horses for courses.

The rules for deferring state pension changed in 2016.

www.moneysavingexpert.com/savings/state-pensions/

X post -Suzy42

I was contacted by DWP a few months before pension was due to start. Another word of warning about deferring is that if you die - your state pension dies with you -so, I went with ‘a bird in the hand’.

I would say think very hard about deferring taking your state pension. OH and I were advised against it by an adviser from the DWP who said the future is unknown. A friend did this and sadly died before he could claim his pension.

Ooops! I meant "if you defer for one year". If you defer for two years, you need to live for another 34 years after starting to receive state pension.

Rumpunch is correct, Chewbacca. You can work it out for yourself.

Let's say for convenience, your pension is £100 a week.

If you defer for two years, you are not receiving £5,200 a year. When you do claim, you receive an extra £5.80 a week (£301.60 a year). You need to live 17 years to recoup the amount you deferred.

It's not quite so simple because it depends what rate tax you are paying.

Sorry for repeating other posters! That’ll teach me to read it all ?

JenniferEccles

Just as a sideline, have you considered deferring your pension for a few years?
Unless the rules have changed recently, it is certainly worth considering if you could manage without it as it increases for every year you defer.
Then when you do claim it, you will get the increased rate for the rest of your life.
With the benefit of hindsight, I wish I had waited as we don’t actually need it for day to day living.

I was too excited though at the thought of that money magically appearing in my bank account each month!

Hmm. Careful with this one. Work it out for your needs. My OH deferred but now realises he’ll have to live to nearly 90 before he gets back what he didn’t claim for those 2 years. If it works for you great, but be careful.

growstuff

I agree Rumpunch. It's only really worth deferring if you're in a higher tax bracket, but expect your total income to dip below the higher rate threshold after retirement. For anybody on a low income who might claim Pension Credit in the future, it's definitely not worth it, as it can affect benefits. Of course, you also run the risk of not surviving for ten years after pension age.

Yes, look at it very carefully. I think the rules have changed
a little in recent years and I have one friend who did it some time ago, but says that he wouldn't do it today if he had to make the same decision.

Yes you can do this but think carefully. A friend of mine worked out that it would take over 10 years before he would start gaining. ie had received the same payment from the government by delaying it.

I'm perplexed by this Rumpunch. I deferred claiming my State Pension for 2 years because I was still working full time. Once I'd decided to retire, I phoned the Pensions Agency with my anticipated date of retirement (you cannot claim a deferred pension online if you've deferred it by more than 12 months) and was informed that my weekly pension had increased by 5.8% for every 52 weeks that I hadn't claimed it. The benefits of that are immediate and beat any savings account currently available.

YouGov website: Your State Pension will increase every week you defer, as long as you defer for at least 9 weeks.
Your State Pension increases by the equivalent of 1% for every 9 weeks you defer. This works out as just under 5.8% for every 52 weeks.
The extra amount is paid with your regular State Pension payment.

Thanks, cathyjean09. That's really useful advice!