DWP update for anyone due to turn 66 this year and reach State Pension age

The Department for Work and Pensions (DWP) has released figures that nearly 12.7 million older individuals in the UK are currently supported by the State Pension. To qualify for this benefit, which is open to those who have reached the State Pension age of 66 for both men and women, one must have contributed at least ten years' worth of National Insurance Contributions.

However, as many approach retirement age this year, they may be unaware that the State Pension isn't automatically issued by the DWP and needs to be claimed to avoid missing out on potential weekly payments of up to £221.20.

The reason for the non-automatic issuance is that some choose to defer their claim to continue working and boost their pension savings, especially if they haven't made the full 35 years of National Insurance Contributions required or were 'contracted out'.

The DWP advises: "You should get a letter no later than two months before you reach State Pension age, telling you what to do."

Expanding on the options available, the guidance indicates that individuals can claim their State Pension or opt to delay (defer) their claim, noting: "If you want to defer, you do not have to do anything. Your pension will automatically be deferred until you claim it."

If you fail to respond to the letter confirming your intention to start claiming State Pension, the Department for Work and Pensions (DWP) will interpret this as a desire to defer, meaning you won't receive any payments, reports Plymouth Live.

Deferring your State Pension could potentially increase your weekly payments when you decide to claim it, provided you defer for at least nine weeks. For every nine weeks you defer, your State Pension increases by the equivalent of 1%, which equates to just under 5.8% for every 52 weeks.

The additional amount is paid with your regular State Pension payment. However, it's important to note that any extra payments you receive from deferring could be subject to tax - more information can be found on the GOV. UK website.

It's also worth noting that deferred State Pensions increase each year in line with the September Consumer Price Index (CPI) inflation rate and the highest measure of the Triple Lock policy.

New State Pension payment rates 2024/25

• Full payment rate: £221.20

• Every four-week pay period: £884.80

Basic State Pension payment rates 2024/25

• Full payment rate: £221.20

• Every four-week pay period: £884.80

Your first payment

Your first payment will be within five weeks of reaching State Pension age and you will get a full payment every four weeks after that. You might get part of a payment before your first full payment.

The letter will tell you what to expect.

You can also choose to receive your State Pension payments weekly or fortnightly which will result in a shorter delay for the first payment.

Your State Pension payment day

The day your State Pension is paid depends on your National Insurance number.

The last two digits of your National Insurance number:

• 00 to 19 - paid on a Monday

• 20 to 39 - paid on a Tuesday

• 40 to 59 - paid on a Wednesday

• 60 to 79 - paid on a Thursday

• 80 to 99 - paid on a Friday

DWP 'starting amount' for the new State Pension

If you have qualifying years on your National Insurance record as at 5 April 2016, DWP calculates a 'starting amount' for you for the new State Pension.

It's the higher of either:

• the amount you would have got under the previous State Pension system up to 6 April 2016, or

• the amount you would get on your record to 6 April 2016 if the new State Pension had been in place at the start of your working life

Both amounts take into account any periods when you were contracted out of the Additional State Pension. Your 'starting amount' could be less than, more than or equal to the full new State Pension.

If your 'starting amount' is less than the full amount of the new State Pension

• Each ‘qualifying year’ you add to your National Insurance record after April 5, 2016 will add a certain amount (about £5.82 a week, this is £203.85 divided by 35) to your ‘starting amount’, until you reach the full amount of the new State Pension or you reach State Pension age, whichever happens first.

If your 'starting amount' is more than the full amount of the new State Pension

• You will get this higher amount when you reach State Pension age. It is possible to have a starting amount higher than the full new State Pension if you have some Additional State Pension. The difference between the full new State Pension and your ‘starting amount’ is called your ‘protected payment’.

If your 'starting amount' is equal to the full new State Pension

• You will get the full new State Pension when you reach State Pension age.

How can I find out how much State Pension I could get?

You can obtain a State Pension forecast online from the Check your State Pension service here. This provides personalised information, including your State Pension age, an estimate of how much State Pension you may get at that point and if you can increase this amount.

It also allows you to view your National Insurance contribution history. More details about deferring your State Pension can be found on the GOV. UK website here.