State pension: Britons could increase sum by up to £14 per week by doing nothing
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The state pension is a bedrock of retirement planning, and many will want to get the most out of it. In this sense, obtaining the full amount is an aim for many Britons in the hopes of securing a comfortable retirement.
While the state pension is usually dictated by a person’s National Insurance contributions, there are ways to increase it.
One of these options is known as deferring, which means a person puts off claiming their state pension.
In doing nothing about claiming, Britons could stand to boost their state pension sum.
The rules slightly differ depending on when the individual reached state pension age.
If this was the case on or after April 6, 2016, then the new state pension rules apply.
In this situation, a person’s state pension will increase every week they defer, as long as this is done for at least nine weeks.
The sum will increase by the equivalent of one percent for every nine weeks a claim is put off.
Consequently, this calculates as just under 5.8 percent for every 52 weeks.
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If a person gets the full state pension of £185.15 per week, deferring for 52 weeks provides an extra £10.70 weekly.
The extra amount is then paid out with a person’s regular state pension payment.
Those who reached state pension age before April 6, 2016 will have slightly different rules.
The sum will increase every week of deferment, as long as this occurs for at least five weeks.
Once again, the state pension increases by one percent for every five weeks a person defers.
This will work out as 10.4 percent for every 52 week period.
Someone in receipt of the full basic state pension of £141.85 who defers for 52 weeks will get an extra £14.75 per week.
In this higher weekly payment option, individuals will get their extra sum paid with their regular state pension payment.
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However, there is another choice for the basic state pension known as the lump sum option.
The Government explains: “You can get a one-off lump sum payment if you defer claiming your state pension for at least 12 months in a row.
“This will include interest of two percent above the Bank of England base rate.”
Individuals should be aware they could get taxed at their current rate on this lump sum.
These examples, however, assume no annual increase in the state pension.
The triple lock guarantees an increase each year, and so the amount someone actually gets from deferring could be even higher.
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