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A new analysis reveals that 66% of adults aged 40 to 65 are unaware of a free £694 boost they could receive from the Department for Work and Pensions (DWP) by deferring their state pension.
This oversight is costing retirees hundreds of pounds annually—money they could be adding to their retirement income with a simple decision.
What Is State Pension Deferral?
If you reach State Pension age (currently 66) and choose not to claim your pension immediately, the DWP offers a bonus in return.
This is known as deferring your state pension. For every 9 weeks you delay, your weekly pension increases by 1%. That adds up to a 5.8% increase per year.
This policy applies to those eligible for the new State Pension (people who reached pension age on or after 6 April 2016).
How Much More Can You Get by Delaying?
With the triple lock raising the 2025/26 State Pension to £230.25 per week, deferring by a full year can increase your weekly income to £243.60—an extra £13.35 per week.
Breakdown of State Pension Increase via Deferral
| Deferral Duration | Weekly Payment | Annual Gain |
|---|---|---|
| No Deferral | £230.25 | £11,973.00 |
| 1 Year Deferral | £243.60 | £12,667.20 |
| Difference | +£13.35/week | +£694.20/year |
That’s £694.20 of free extra income per year—just by deferring your pension for 12 months.
Why Don’t People Know About It?
A report by retirement specialist Just Group, based on DWP data, found that two-thirds of working-age adults were unaware of this pension-boosting option. Most individuals assume the State Pension must begin as soon as they hit retirement age.
Stephen Lowe, group communications director at Just Group, said:
Deferring your State Pension is essentially a trade-off—get your pension now or more later. For those who don’t urgently need the funds, it’s an effective way to boost long-term income.”
Who Should Consider Deferring?
Delaying your pension is particularly useful if you:
- Continue working beyond retirement age
- Want to reduce your income tax bill temporarily
- Don’t need the money immediately and want higher future payments
- Are in good health and expect to live longer
It’s also helpful for tax planning, especially for those nearing higher tax thresholds.
However, deferring may not suit everyone. Those with shorter life expectancy or immediate financial needs might benefit more from claiming sooner.
Is It Automatic?
No, deferring is not automatic. If you do not claim your State Pension when eligible, it will automatically be deferred. But once you make a claim, payments start at the standard rate unless you’ve made arrangements to defer.
To defer, you simply delay making a claim once you reach the State Pension age. There’s no need to notify the DWP—they will automatically apply the increased rate once you claim later.
The fact that 66% of adults aged 40 to 65 are unaware of the £694 bonus available through state pension deferral highlights a critical information gap.
With rising living costs and an aging population, making informed retirement decisions is more important than ever.
Delaying your State Pension may not be right for everyone, but for those in good financial health, it can be a smart move to boost retirement income and secure better financial stability in later life.
FAQs
How much can I get by deferring my state pension for one year?
You can receive an extra £694 per year, based on the 2025/26 rate of £230.25 per week.
Who qualifies for this pension deferral increase?
Anyone reaching State Pension age on or after 6 April 2016 can defer and receive the increased payment.
Is deferring my state pension automatic?
If you don’t claim it at State Pension age, it’s automatically deferred. You’ll get the increase when you decide to claim later.