The UK State Pension can provide a reliable source of income throughout retirement that you can use as a foundation to build on.
But did you know that you could delay or stop claiming your State Pension and boost the amount you receive, potentially by hundreds of pounds a year?
According to research from retirement specialist Just Group, 25% of 55- to 64-year-olds are oblivious to the fact that it's possible to delay or stop claiming the UK State Pension.
The full State Pension is worth more than £220 a week in 2024/25
Generally, you’ll need at least 10 qualifying years on your National Insurance record to receive any State Pension. The good news is that they don’t have to be 10 consecutive years.
In 2024/25, the full UK State Pension is £221.20 a week. This amount is protected by a “triple lock”, which means the amount you receive rises each year by the higher of:
- Average wage growth
- Inflation
- 2.5%.
If you’ve paid enough UK NICs to qualify, you’re entitled to take whatever State Pension you’ve accrued, no matter where you are living.
If you’re eligible, you’ll receive State Pension payments for the rest of your life, so they could be a valuable supplement to your other retirement savings.
Delaying when you claim your State Pension could increase the amount you’ll receive
For every nine weeks you defer, your State Pension will increase by 1%. So, if you defer for a year, it will increase by almost 5.8%. This means that even if you’re eligible for the full State Pension, deferring your claim for just one year could mean you receive an extra £667 annually for the rest of your life.
You can defer your State Pension for as long as you want. However, whether deferring is in your best interests will depend on your individual circumstances.
For example, if you have other sources of income, deferring may be a good idea, especially considering the amount it could increase by if you wait.
On the other hand, delaying when you claim your State Pension will also mean missing out on annual income that will take some time to make up with the deferred increase. Depending on your circumstances, this may mean it is not in your best interest to defer.
You're entitled to claim your UK State Pension even if you’re living abroad
You can claim the State Pension if you live overseas. However, the rules around how much you will receive, and any inflation-proofing, will depend on where you live.
It’s possible to arrange to have your pension paid direct into your overseas bank account. Doing this will mean you'll avoid having to use a UK account and pay currency exchange costs on transfers.
Since the UK government bulk-buys currencies for this purpose, you might also benefit from a more favourable exchange rate.
Your State Pension is not automatically paid when you reach your State Pension Age
The State Pension doesn’t kick in automatically, you must take active steps to claim it. Visit the government website to apply.
To make your claim abroad, you'll need to complete form IPC BR1, which you can download from the government website.
You can submit your claim up to four months before you reach your State Retirement Age.
Get in touch
Understanding how much State Pension you could claim can be complicated, especially if you live outside the UK.
Talk to one of our expert financial planners. They will discuss your situation in detail and help you understand what the State Pension is worth to you and advise you on all your options.
Taking a holistic view of your finance and life circumstances, they will help establish the steps you should take to achieve the level of retirement income you're aiming for.
Email enquiries@alexanderpeter.com or give us a call on +44 1689 493455.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.
The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.
