State pension UK: Deferred payments could be received as a lump sum – rules explained

State pension deferment rules will allow people to increase their eventual payments if they defer for at least nine weeks. For recipients of the new state pension, payments can be increased by the equivalent of one percent for every nine weeks of deferment, which equates to just under 5.8 percent for every 52 weeks.

Those who reached state pension age before April 6 2016, will need to defer for at least five weeks to benefit, with the payments also increasing by one percent.

This works out as 10.4 percent for every 52 weeks of deferment.

While deferring state pensions are usually considered before claiming, it is also possible to pause and defer payments once they have been claimed, which will increase payments once they’re received again.

The extra amounts can come through with the regular state pension but those who reached retirement age before 2016 have a unique option for how they can receive income.

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The one-off lump sum payment option will only be available to those who have deferred for at least 12 months in a row.

It should be noted the payments will also include interest of two percent above the Bank of England base rate.

Regardless of how and what a person receives from their boosted state pension, the extra amounts will usually increase each year based on the Consumer Price Index (CPI).

However, these increases will not be awarded to those who live abroad.

To be eligible for the new state pension, at least 10 years of National Insurance contributions will be needed.

For the full amount of £175.20 per week, a person will need at least 35 years of contributions.

Those eligible for the old or basic state pension will need 30 years of contributions for the highest payment of £134.25 per week.

No matter what kind of state pension a person receives, their payments are guaranteed to increase every year by the highest of 2.5 percent, average earnings or CPI increases under triple lock rules.

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