Knowledge Base

Should you defer your state pension

Started by: frenchielove
On: 22/07/2017 | 14:48
Replies: 19

by: frenchielove
on: 22/07/2017 | 14:48 edited: 22/07/2017 | 14:49

Just been reading this and found it very interesting, I did not defer mine but some of you may need to be thinking about it shortly? Apologies if this has already been covered.

Message 1 of 20
by: wilja
on: 23/07/2017 | 07:43

@frenchielove Interesting post, I didn't defer mine, in truth I didn't need it so I could have but who knows how long we have to draw it? I didn't want to give it all back to the government 😀

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Message 2 of 20
by: frenchielove
on: 23/07/2017 | 07:46

I did need mine @wilja but anyway, I thought, a bird in the hand, could be dead before I draw it? Interesting though

Message 3 of 20
by: bladerunner929
on: 23/07/2017 | 20:18

Also worth noting that if at 65 or whatever age you are able to claim state pension and you are in full time employment deciding to continue working, if your employer is happy to allow this, then by defering your state pension and continuing emplyment, I believe you no longer pay national insurance contributions, this in effect would be an additional saving while continuing to work on.

Message 4 of 20
by: harrybeau
on: 23/07/2017 | 22:35

If my rough calculation is right I estimate that it would take about 16 years at  the enhanced rate to break even with one year of deferred pension. Not taking inflation into account.

Message 5 of 20
by: techiebloke
on: 24/07/2017 | 08:14

Don't think there'll be one by the time I retire so that's why I started a stakeholder and have a stocks and shares ISA which I'm building as a ready cash supply should I need it.

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Message 6 of 20
by: richard_soponski
on: 24/07/2017 | 08:57 edited: 24/07/2017 | 09:02

At present, the life expectancy for someone who just reached state pension age (SPA) is about +20 years. In my opinion it would be best to take it as soon as possible, unless there is a very good reason to delay it.


I know people carry on working for personal rather than financial reasons, but it's still better to take it ASAP. The main downside to taking the state pension while working is you will pay more income tax.


I managed to retire early and won't get the state pension until november this year. Together with my deferred workplace pensions, I will, unfortunately, be paying income tax unless the personal allowance rises considerably. If I deferred any pension past SPA, I'd just end up paying even more tax when they were activated. You can't win.


EDIT: There is a life beyond the workplace....

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Message 7 of 20
by: richard_soponski
on: 25/07/2017 | 08:46

Just as an afterthought, I can think of only 1 good reason to defer your state pension if it's going to be your only (or main) source of income - and that is to get the money together to top up any gaps in your national insurance contributions, as these are what the new state pension, introduced in April 2016, is based on.

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Message 8 of 20
by: c_lockett
on: 26/07/2017 | 11:17
I can't see me being able to retire @frenchielove. I worked part time when my husband was alive and our son was small. So I doubt if I'll have enough contributions to make a pension to live on. At the moment I still don't earn enough to pay NI but have enough to live on contentedly. I've recently opted in to the work place pension ,but having only 12 years left to retirement at 67 I doubt if it will amount to anything significant. I did look into paying into the state pension to make up qualifying years but it was too expensive to do. So I'm working on the basis that I'll work till I drop sadly.
Message 9 of 20
by: frenchielove
on: 26/07/2017 | 11:22

Bless you @c_lockett you sound to me like the sort of person that always makes the best of everything, even if you cannot retire fully, maybe cut your hours? That is what I did. It isn't such a bad thing to be at work, if you like your job, I certainely missed the people and the buzz. Good luck to you 

Message 10 of 20