The figures reveal that the scheme can prove highly lucrative
Thousands of pensioners are strategically using a certain State Pension scheme to secure substantially larger weekly payments.
Nearly 42,000 Brits claimed a previously deferred State Pension in 2023/24, receiving enhanced payments as compensation for their patience, according to figures obtained by insurer Royal London through a Freedom of Information request. In total, 41,938 people eventually claimed after deferring – though this represented a sharp decline from the previous year, dropping by more than a fifth (22%) from 54,037 in 2022/23.
The figures reveal that deferral can prove highly lucrative for those prepared to wait. One in four claimants – 10,656 people – had delayed claiming for five years or longer, whilst 4,435 had held off on their pension for at least a decade.
On average, people deferred for four years, increasing their income by up to £50 weekly once payments eventually commenced. Deferring involves opting not to claim the State Pension upon reaching State Pension age – presently 66, and scheduled to increase to 67 from April.
Under the current system, payments increase by 1% for every nine weeks of delay, equating to 5.8% annually. Those who reached State Pension age before 6 April 2016 were entitled to a considerably more generous increase of 10.4% per year, applied for each year they deferred. The statistics also expose a tiny cohort of extraordinary cases, with 591 people who hadn’t collected their State Pension two decades or more beyond eligibility.
Several fresh claimants in 2023/24 had put off claiming for over 30 years, with those who waited longest averaging an astonishing 32-year postponement. These ‘super-postponers’ initially qualified way back in 1991/92, when the State Pension age stood at 65 for blokes and 60 for women – suggesting many are now well into their 90s, with some possibly having crossed the century mark.
Brits typically hold off claiming for two key reasons: boosting their State Pension payments down the line, or cutting their taxable earnings whilst still grafting. This strategy often appeals to higher-rate taxpayers looking to manage their tax burden.
Yet Royal London has issued a stark warning that postponing isn’t suitable for everyone – especially basic-rate taxpayers who might not survive long enough to recoup their losses. Take someone who defers from January 2026 for a year, for instance – they’d pocket £243.60 weekly from 2027, alongside any triple-lock uplifts. That works out as an additional £694.72 annually before future bumps.
But by holding off for 12 months, they’d forfeit nearly £12,000 in State Pension payouts, presuming they’re entitled to the full new State Pension. A basic-rate taxpayer would have to make it to roughly 82 to come out ahead from a year’s delay. For those earning above £50,270, the break-even point drops to approximately 79.
Sarah Pennells, a consumer finance expert at Royal London, has issued a stark warning to those considering deferring their State Pension: “With the State Pension age now at 66 and due to start rising to 67 from April, many people are only too keen to claim their State Pension. However, our figures show that some people, for whatever reason, are delaying getting their State Pension payments.”
She noted a significant drop in the number of people deferring in 2023/24 compared to the previous year, suggesting: “This could be because fewer pensioners are able to manage without the State Pension.”
But she also hinted at a potential shift on the horizon: “However, with the new State Pension expected to rise to just below the personal allowance from April, we could see an increase in the numbers of people with other forms of income deferring, as they look to reduce the income tax they pay.”
Pennells urged caution for those contemplating this move: “If you’re thinking of delaying claiming your State Pension, then it’s a good idea to assess whether it is right for you. Getting the extra money may look attractive, but you are giving up the right to receive any State Pension payments until you stop deferring, and it could take years to see the benefit. The less tax you pay, the less worthwhile delaying might be.”
She said: “If someone defers their pension and then dies, their surviving spouse or civil partner will only receive the extra pension if the person who deferred reached State Pension age before 6 April 2016. These figures highlight why it’s so important to think carefully before making this decision.”
Pros of deferring State Pension
Higher weekly income: Payments rise by 5.8% for each year you defer.
Bigger future increases: Annual rises apply to a higher starting amount.
Tax savings: Deferring can reduce taxable income if you are still working.
Cons of deferring State Pension
You may never break even: There is no guarantee you will live long enough to recover missed payments.
Less money now: Giving up income today could affect day-to-day living or savings.
