State pensioners born after 1951 can add up to £694 extra to their pension pot thanks to a little-known rule – but it means delaying retirement by a whole a year. Men born on or after April 6, 1951, and women born on or after April 6, 1953, are eligible to claim the new State Pension once they reach State Pension age, which is currently 66.
Anyone born before these dates will get the basic State Pension instead. But retirees don’t automatically start receiving their pension after turning 66 – you have to submit a claim for it. You should receive a letter no later than two months before reaching State Pension age asking you if you want to either claim your pension, or defer it. If you opt to defer then you don’t have to do anything, as your pension will automatically be delayed until you decide to claim it. This option also allows you to add some extra cash to your pension pot – up to £694.20 if you delay for a whole year.
If you reach State Pension age on or after April 6, 2016, then your pension pot will increase every week you defer – providing you defer for at least nine weeks.
Currently, for every nine weeks you defer your State Pension will increase by 1%, which works out as just under 5.8% for a whole year, or £694.20.
The new State Pension is currently worth £230.25 per week if you get the full rate. So by opting to defer for 52 weeks, you can get up to £13.35 extra per week – amounting to £694.20 over a year.
Of course, not everyone is eligible to get the full new State Pension rate of £230.25 and if you get less than this then you might need more National Insurance qualifying years to boost your weekly payments.
If you’re on the new State Pension you need at least 10 qualifying years on your National Insurance record to get any new State Pension and you usually need 35 qualifying years to get the full amount.
Those who are entitled to the full amount will benefit from a £470 boost per year after the new State Pension was uprated by 4.1% this month.
The DWP said: “With uprating in effect, pensioners receiving the full basic State Pension will see their weekly payments rise from £169.50 to £176.45 per week, worth an additional £360 a year. In addition, the full rate of the new State Pension will increase from £221.20 to £230.25 per week, an increase of £470 a year.”
Minister for Pensions Torsten Bell added: “Raising the State Pension and rescuing the NHS – these are this government’s priorities to give all pensioners the dignity they deserve in their retirement. Those who have worked hard throughout their lives, paying into the system, are owed nothing less.
“We’re improving the lives of millions of pensioners through our £7.84 billion additional funding for the State Pension this year. That means up to £470 extra in pensioners’ pockets from this week and comes alongside our work to boost Pension Credit uptake, and the £26 billion we’ve invested in the NHS that has seen waiting lists in England fall for 5 months in a row.”
