66% Near Retirees Unaware of £694 State Pension Deferral Boost

A significant majority of adults aged 40 to 65 in the UK remain unaware that they can defer claiming their state pension to increase future payments, potentially missing out on nearly £700 annually. Individuals eligible for the New State Pension, introduced after April 6, 2016, receive a 1% increase in weekly payments for every nine weeks they defer, totaling approximately a 5.8% boost per full year of deferral. With the 2025/26 state pension set at £230.25 per week, deferring for a year raises weekly payments to £243.60, adding about £694.20 annually, with future increases linked to inflation. Despite this benefit, only about 10% of adults aged 66 to 75 have chosen to delay their pension, partly due to confusion or misconceptions about the impact on payments. Those who reached state pension age before April 6, 2016, can earn even higher increases—around 10.4% annually—by deferring, as illustrated by individuals who have nearly doubled their pension by strategic deferral and persistence in navigating pension rules. Experts emphasize that deferring is a trade-off between immediate income and enhanced future benefits, which could also help reduce short-term income tax liabilities.