Briefing Notes

Briefing Note 19 - The gain from deferring state pensions

State pensions become payable at age 65 for men and 60 for women, but they can be deferred, with some restrictions. Briefing Note 4 looked at deferring state pensions. Since then, the Pensions Bill 2004 has passed the proposed improvement in deferral into law.

This Briefing Note updates the analysis in Briefing Note 4 on the benefit of deferring state pensions: not the actual lump sum promised by government, but that amount compared to building up a lump sum yourself. It finds that deferral may be attractive to individuals who can afford to receive their state pension later. It is not necessarily linked to carrying on working after state pension age, but it is more valuable for those who go into a lower tax bracket after they finish work a year or more after state pension age.