Reaching retirement age is a significant milestone, and for many Britons, the State Pension provides essential financial support. However, those turning 66 this year are being reminded to actively claim their State Pension—as it is not paid automatically. Failing to do so could result in missed payments of up to £221.20 per week. Here’s everything you need to know about claiming your State Pension and whether deferring it could be beneficial.
Why Do You Need to Claim Your State Pension?
The State Pension is not automatically paid when a person reaches the official retirement age. The Department for Work and Pensions (DWP) requires individuals to submit a claim before they start receiving payments.
Who Is Eligible?
- You must be 66 years old or above in 2024.
- You need at least 10 years of National Insurance Contributions (NICs) to qualify.
- To receive the full State Pension, you must have contributed 35 years to National Insurance.
What Happens If You Don’t Claim?
If you don’t actively claim your State Pension, you won’t receive any payments. The DWP sends a notification letter around two months before retirement age, instructing individuals on how to claim. If there is no response, the DWP assumes you have chosen to defer your pension.
Deferring State Pension – Is It Worth It?
Some Britons may choose to defer their State Pension to increase their future payments. Here’s how it works:
How Does Deferral Work?
- If you do nothing, your State Pension will be automatically deferred until you claim it.
- The longer you defer, the more your payments will increase.
- However, additional pension income may be subject to tax deductions.
How Much More Can You Get?
The increase depends on whether you reached State Pension age before or after April 6, 2016.
For Those Who Reached Pension Age Before April 6, 2016
- Pension increases by 1% for every five weeks deferred.
- A full 52-week deferral results in a 10.4% increase.
- If the 2024/25 basic State Pension is £169.50 per week, deferring for one year would add £17.62 extra per week.
For Those Who Reached Pension Age On or After April 6, 2016
- Pension increases by 1% for every nine weeks deferred.
- A full 52-week deferral results in an extra 5.8% in payments.
- Based on the 2024/25 full flat-rate State Pension of £221.20 per week, a one-year deferral would increase payments by £12.82 per week.
Is Deferring the Right Option for You?
- Deciding whether to defer depends on personal circumstances:
- If you don’t need immediate financial support, deferring could boost long-term income.
- If you are in good health, deferring may be beneficial.
- If you need the money immediately, deferring may not be the right choice.
- Extra pension payments could be taxable, depending on your total income.
How to Check Your State Pension Status
Before making a decision, individuals can check their State Pension forecast online using the Check Your State Pension service. This service allows users to:
- View their State Pension age.
- Get an estimate of their pension payments.
- See their National Insurance contribution history.
When Will You Receive Your First Payment?
- Once you claim your State Pension, you can expect:
- Your first payment within five weeks after reaching pension age.
- Regular payments every four weeks after the first payment.
Claiming the State Pension is essential to ensure financial stability in retirement. Since payments are not automatic, retirees must actively claim their pension or risk losing out on up to £221.20 per week. While deferring can increase weekly payments, the decision depends on personal financial needs and health conditions. Checking your State Pension forecast online can help you plan better for your retirement.
FAQ
Is the UK State Pension paid automatically at retirement age?
No, the UK State Pension is not paid automatically. You must actively claim it through the Department for Work and Pensions (DWP) when you reach State Pension age.
How much is the UK State Pension in 2024?
For 2024/25, the full flat-rate State Pension is £221.20 per week. If you reached State Pension age before April 6, 2016, your pension amount may vary.
What happens if I don’t claim my State Pension?
If you don’t claim, the DWP assumes you are deferring your pension. You won’t receive payments until you actively request them, but deferring could increase your weekly payments.
Can I defer my State Pension?
Yes, you can defer your State Pension. If you defer for at least nine weeks, your weekly payments will increase when you eventually claim.
How much more will I get if I defer my State Pension?
If you reached State Pension age before April 6, 2016, deferring for one year increases your pension by 10.4%. If you reached it after April 6, 2016, the increase is 5.8%.
How can I check my State Pension forecast?
You can check your State Pension forecast online using the ‘Check Your State Pension’ service on the UK government website.
