Pensioner left £400 out of pocket waiting for DWP to release her deferred state pension | Personal Finance | Finance

In 2023-24, the new state pension will be £203.85 a week and the basic state pension will be £156.20 a week, but not everyone gets this amount.

However, anyone can increase their state pension if they do not claim it on the day they turn 66.

Every week delay means a little more pension when someone chooses to retire.

A report by the Institute for Fiscal Studies (IFS) found that one in six working pensioners have claimed their pension.

On the BBC Money Box podcast, Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown explained how much someone could get from deferring their state pension.

Those who reach state pension age on or after 6 April 2016 will receive an increase for each week they defer, as long as they defer for at least nine weeks.

Their state pension is increased by the equivalent of one per cent for every nine weeks they defer. This works out as just under 5.8 per cent for every 52 weeks – that’s £11.82 per week.

On current figures, a year’s deferment would add an extra £614 a year to their state pension, over their lifetime.

It should be noted that to get this, savers will have given up £10,600 in state pension that they could have claimed in the first year.

However, this is not as generous as those on the basic state pension who reached state pension age before 6 April 2016.

The basic state pension will increase by one per cent for each week a person defers, as long as they defer for at least five weeks.

This works out as 10.4 percent for every 52 weeks. The additional amount is paid with the regular state pension payment.

Karen is from London, struggling to find extra money after deferring her state pension.

Before claiming her state pension, she realized that the DWP had not taken into account her deferred amount and tried to contact them.

She started her inquiries in March this year, and eight months later she is still waiting for her extra state pension.

Karen is about £400 out of pocket, which is a significant amount, especially in economic terms.

Ms Morrissey continued: “That is very challenging. I would say the best way forward is to complain to the pension service.

“She doesn’t seem to be hearing back from anyone at all. If you contact the pension service they have to get back to you within seven working days and that might be her next option. “

However, it is important to be aware that any additional payments received through deferral may be taxed.

This is because the state pension is a taxable form of income, so if the amount exceeds a person’s personal allowance, they will have to pay tax on anything over the threshold. The current standard personal allowance is £12,570.

BBC Money Box contacted the DWP for comment, however they said they had not yet had time to look into the case.

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