The data shows deferral can pay handsomely (Image: Getty)
Thousands of pensioners are deliberately putting off claiming their State Pension to secure bigger weekly payouts later on – with some delaying for decades.
Almost 42,000 people claimed a previously deferred State Pension in 2023/24, pocketing higher payments as a reward for waiting, according to figures obtained by insurer Royal London via a Freedom of Information request.
In total, 41,938 people finally claimed after deferring – but that was down sharply on the year before, falling by more than a fifth (22%) from 54,037 in 2022/23.
The data shows deferral can pay handsomely for those who wait long enough. One in four claimants – 10,656 people – had delayed claiming for five years or more, while 4,435 had postponed their pension for at least ten years.
On average, people deferred for four years, boosting their income by up to £50 a week once payments finally started. Deferring means choosing not to claim the State Pension on reaching State Pension age – currently 66, and due to rise to 67 from April.
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For those under the current system, payments rise by 1% for every nine weeks of delay, equivalent to 5.8% a year. Those who reached State Pension age before 6 April 2016 were entitled to a far more generous uplift of 10.4% a year, applied for every year they delayed.
The figures also reveal a small group of extreme cases. There were 591 people who still had not claimed their State Pension 20 years or more after becoming eligible.
Some new claimants in 2023/24 had deferred for more than 30 years, with the average delay among the 25 longest deferrals standing at 32 years.
These so-called ‘super-postponers’ first became eligible back in 1991/92, when the State Pension age was 65 for men and 60 for women – meaning many would now be in their 90s, with some potentially over 100.
People usually delay claiming for two reasons: to increase their State Pension income later, or to reduce the amount of taxable income they receive while still working. That can make deferral attractive to higher-rate taxpayers.
But Royal London warned that deferring does not suit everyone – particularly basic-rate taxpayers who may not live long enough to break even.
Someone deferring for one year from January 2026, for example, would receive £243.60 a week from 2027, plus any triple-lock rises along the way. That equates to an extra £694.72 a year before future increases.
However, by delaying for a year they would miss out on almost £12,000 in State Pension payments, assuming entitlement to the full new State Pension.
A basic-rate taxpayer would need to live until around 82 to benefit overall from delaying by a year. For someone earning more than £50,270, the break-even age falls to about 79.
Sarah Pennells, consumer finance specialist at Royal London, said: “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.
“The numbers deferring in 2023/24 have fallen quite dramatically from the previous year, which could be because fewer pensioners are able to manage without the State Pension. 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.
“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 added: “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.