DWP warning over 12 benefits that could stop you boosting your state pension
The DWP is warning that people who defer their state pension in a bid to build a bigger retirement kitty will not always get more cash. Some people may not realise that you do not get your state pension automatically - you have to claim it.
You can either claim your State Pension or delay or defer. And if you want to defer, do nothing - your pension will automatically be deferred until you claim it.
Many people use this method if they continue working past the state pension age as it allows them to build up a heftier pension pot for when they actually retire. For those on the new state pension system, you have to defer your state pension for at least nine weeks.
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It will increase your payments by roughly 1% for every nine weeks. This means if you’re entitled to the full £221.20 per week payment but defer it, for a year you’ll receive an extra £12.82 per week when you start claiming it., according to GOV.UK.
It sounds attractive. But be warned - this is not always the case.
Certain benefits and other circumstances could prevent the deferral method from boosting your state pension. This could include benefits your partner receives even if you don’t, or if you’re in prison.
If you receive any of the following benefits, you cannot build up extra state pension when deferring:
Widowed Parent’s Allowance
Incapacity Benefit
Pension Credit
Severe Disablement Allowance
Carer Support Payment
Jobseeker’s Allowance (income-based)
Universal Credit
Income Support
Carer’s Allowance
Unemployability Supplement
Employment and Support Allowance (income-related)
Widow’s Pension
Similarly, if your partner gets any of the following benefits you will not be able to build up extra state pension when deferring:
Universal Credit
Jobseeker’s Allowance (income-related)
Employment and Support Allowance (income-related)
Income Support
Pension Credit
You have to defer your state pension for a certain number of weeks in order for any extra to start building up. Any weeks you or your partner receives these benefits will not count towards this deadline.
If you are able to build up higher weekly state pension payments by deferring, this could reduce the amount you get from the following benefits:
Council Tax Reduction
Income Support
Pension Credit
Universal Credit
Employment and Support Allowance (income-related)
Jobseeker’s Allowance (income-related)
Tax credits
Housing Benefit
Deferring your state pension also has an impact on other benefits. For example, people who are eligible for Winter Fuel Payments but have deferred their state pension will need to apply for this benefit as it won’t be automatic.