Half don’t know they can boost state pensions by £528 a year by deferring

Half don’t know they can boost state pensions by £528 a year by deferring

Millions unaware state pension deferrals can boost income

Brean Horne
Mon, 05/11/2020 – 13:15

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Almost half (47%) of 55 to 64-year olds do not know that deferring their state pension will increase these payments when they start to claim, according to new research from Just Group.

Putting off the age you claim the state pension means the amount you get can go up significantly. This can be a useful future income boost for those that do not need to draw this money as soon as they retire.

Just Group found that only 12% of people aged 65 and over had deferred their state pension. Women are slightly more likely to defer than men, with 12% aged over 65 doing so, compared to only 9% of men.

With the new full state pension rising to £175.20 this April, deferring for one year would result in a boost of £10.16 a week, a total of £528.32.

Roughly one million people are receiving a state pension boost as a result of deferring, 25% fewer than the peak in 2004, according to the Department for Work and Pensions.

What is deferring the state pension?

The state pension is not paid automatically, and you will have to make a claim to start receiving payments once you reach pension age.

It is possible to delay when you start receiving your state pension income, known as deferring.

How much could I get for deferring my state pension?

For those who reach state pension age on or after 6th April 2016, every nine weeks of deferral boosts pension income by 1%.

That works out to just under 5.8% more income for every 52 weeks of deferral.

How do I defer my state pension?

You should receive a letter two months before you reach state pension age, giving you more details about what you can claim.

If you wish to defer your state pension, you do not need to take any action. Your pension will be deferred until you decide to claim it.

It is also possible to defer your state pension payments after you start claiming. You need to get in contact with the Pension Service on 0800 731 0469.

Keep in mind that this can only be done once during your retirement.

Should I defer my state pension?

Deferring the state pension could be an option if you are in good health and have sufficient income coming in from other sources.

This could be from another pension, or because you have continued to work.

Stephen Lowe, group communications director at Just Group, says: “Deferring state pension is an important option for the rising number of over-65s in good health and who plan to carry on working.

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Nearly £20 billion lost in unclaimed pensions – here’s how you can track yours down

Nearly £20 billion lost in unclaimed pensions – here’s how you can track yours down

The average unclaimed pension pot is worth £13,000

Stephen Little
Mon, 05/11/2020 – 11:28

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Pension pots worth nearly £20 billion have gone unclaimed because people are moving home and not telling their provider.

Research from the Association of British Insurers (ABI) shows that around 1.6 million pension pots worth an estimated £19.4 billion have been lost – the equivalent to £13,000 for each pot.

The ABI says people are losing track of their pensions because they rarely contact their pension provider when they move house.

Its survey of over 2,000 savers revealed that when people move home telling their bank or utility provider is the highest priority on their list.

It also found nine out of 10 people automatically think about telling their GP or dentist about their change of address.

However, only one in 25 instinctively think about telling their pensions provider when they move.

The average person has 11 different jobs over their lifetime and moves home eight times, which means it is easy to lose track of your pension if you are not careful.

The Government predicts that there could be as many as 50 million dormant and lost pensions by 2050.

The ABI says insurers are trying to reunite people with their lost pensions, life insurance and investments. This is usually done by sending a letter to their new address.

Yvonne Braun, director of policy, long-term savings and protection at the ABI, says: “During the lockdown many of us have been focussing on those jobs that never get done, so now is the perfect opportunity to check all your financial information is up to date with the correct address.

“Long-term savings providers will continue to work hard to reunite people with their lost money. People deserve all the cash they are entitled to. To ensure more people than ever are reconnected we will continue to work with Government to explore ways data can be used to verify customer addresses.”

How to track your pensions down

When planning for retirement you need to know how much income you will be receiving from all of your pensions.

For people who lose track of their pensions the Government provides a free online pensions tracing service which can help you find any lost workplace pensions.

All you need is the name of an employer or a pension provider to use the service.

The service will not tell you whether you have a pension, or what its value is.

Alternatively, you can contact the Pension Tracing Service by post.

When you have tracked down all your funds you can then consider combining your pensions into a single plan to make them easier to manage and to reduce fees.

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