State pensions become payable at age 65 for men and 60 for women. They can be deferred for up to 5 years, with an increment to the eventual income of one-seventh of 1% for every week deferred. From 2006, the option is planned to become more generous, with the enhancement increased to one-fifth of 1% for every week deferred. This means that after deferring for five years, someone who would otherwise receive a total state pension of £100 per week would receive instead £137 on the current basis and £152 on the proposed new basis.

This Briefing Note explores how important deferral of state pension is, and whether the new option is a good incentive. It also looks at whether it will encourage later, more flexible retirement.


To download Briefing Note 4, please click here.