Should I defer my state pension?

Can I defer my state pension?

You don't have to start receiving the state pension when you reach state pension age - you can choose to delay payments for as long as you want.

Doing so can boost the amount you get from your state pension when you do start taking it.

But it will take years for you to be better off overall than if you had started receiving your state pension straight away.

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How much could I get by deferring my state pension?

Under current rules, for every nine weeks that you delay taking your state pension, your payments will increase by 1%. 

So for each full year you defer, you get an extra 5.8% added to your payments. 

Based on the new full state pension (£230.25 a week in 2025-26), deferring for a year would give you an extra £13.35 a week – or around £694 a year.

This is less generous than the old state pension system. If you reached state pension age before April 2016 you could get an extra 10.4% for each year you defer, adding an extra £18.35 a week to the basic state pension of £176.45 (in 2025-26).

Under the old rules you could also opt to receive a one-off lump sum plus interest if you deferred for at least a year, instead of higher weekly payments. This option is no longer available for those reaching state pension age after April 2016.

Is it worth deferring the state pension?

It can be hard to know whether deferring the state pension will be worthwhile, as it ultimately depends on how long you end up living for.

The table below shows what your overall financial position could look like at different stages after deferring the state pension for one year. 

Figures are based on the full state pension in 2025-26 (£11,973) and assume the state pension increases by 2.5% every year (this is the minimum increase under the triple lock guarantee).

In this scenario, you’ll need to live for at least 15 years after you start receiving payments to ‘break even’ – in other words, to end up with more money overall than if you had taken payments straight away. 

So if you defer your state pension for a year and start taking it at 67, it will take you until 82 to recoup the £11,973 you missed out on in the first year.

How many years can you defer the state pension?

You can defer claiming for as long as you like. The minimum deferral period is nine weeks.

If you've already started receiving the state pension, it is still possible to defer it, but this can only be done once.

Do I pay tax on deferred state pension?

Yes, income from the state pension - including deferred payments - is taxable at your usual income tax rate.

There is a potential tax advantage to deferring your state pension: if you’re still working and the combination of these earnings plus the state pension would push you into a higher tax bracket, you might decide to wait until you stop working to take your payments, so that these will be taxed at a lower rate.  

However, you also need to consider whether the increase in your payments by deferring your state pension could push you into a higher tax bracket when you start claiming it in the future

Will deferring my state pension affect any benefits?

If you’re receiving any benefits, such as carer’s allowance or pension credit, you won’t be able to increase your state pension by deferring it.

If you're receiving extra state pension as a result of having deferred it, bear in mind that this could reduce the amount you get from certain benefits because the extra state pension will increase your income. 

Deferring the state pension - pros and cons

The ability to boost your future payments is an obvious advantage to deferring your state pension.

But there's a risk you won't live long enough to recoup what you initially gave up by delaying payments. 

If you defer for a year, it'll take at least 15 years for you to receive more overall than if you had taken the income straight away. 

Life expectancy at the age of 65 is 18.5 years for men (83.5) and 21 years for women (86), according to data from the Office for National Statistics for 2021-23. 

So if you're in poor health and your life expectancy is lower than average, deferring your state pension is less likely to be worthwhile.

How do you defer the state pension?

You don’t automatically receive the state pension when you reach state pension age – you have to make a claim. 

If you do nothing, your state pension is automatically treated as deferred.

Around two months before you reach state pension age, you should receive a letter setting out your options and explaining what to do. The letter will include an invitation code that you’ll need to use in the application.

To start getting the money, you can apply online at gov.uk using the invitation code, your marriage details and your bank or building society information. You can also contact the Pension Service on 0800 731 7898 to initiate your claim.