DWP gives you an extra £666 a year if you use simple trick
Pensioners can add £66 a year to their state pension by using a simple trick - deferring. The Department for Work and Pensions (DWP) allows you to defer your pension - meaning that instead of getting the money when you are entitled to it, you can 'save it up' and add it to your future weekly payments.
When you reach 66, pension age, the DWP will write to you four months before your birthday and invite you to make a claim. Insteasd you can make a "pension deferral" - choosing no to claim it yet.
The Guardian's Rupert Jones reported: "Let’s say you are entitled to £221.20 a week (£11,502 a year), which is the current full rate for the new state pension. By deferring for 52 weeks, you will get an extra £12.82 a week, which adds up to an extra £666 a year for the rest of your life.
"That’s based on the current figures and assumes no annual increase in the state pension. In that example, you have given up £11,502 of income. That is a lot of cash and if the figures stayed the same it would take 17 years before you were better off deferring."
If you want to defer, you do not have to do anything. Your pension will automatically be deferred until you claim it. Deferring your state pension could increase the payments you get when you decide to claim it - however, this depends on when you reached 66.
Steve Webb, the former pensions minister who is now a partner at the actuarial firm LCP, said: “Whether or not deferral makes sense depends on your individual circumstances. Those who are in good health and can expect a long retirement may end up in profit if they put off taking their state pension and then draw an enhanced pension at a later date.
“And anyone planning to work past pension age might want to put off taking their state pension, as otherwise their pension will be added to their wages and taxed in full.”