by The Department for Work and Pensions (DWP) has released figures which show that the State Pension is currently supporting almost 12.7 million older people across the UK.
To be eligible for this payment, which is available to those who have reached the State Pension age of 66 for men and women, individuals must have made at least ten years of National Insurance Contributions. However, as many people approach official retirement age this year, they may not realize that this contributory benefit is not automatically issued by the DWP and must be claimed, or they will lose weekly payments that they are worth £221.20.
The reason the money is not paid once a person reaches State Pension age is that some people choose to postpone their claim in order to continue working and increase their pension savings, especially if have paid the full 35 years of National Insurance Contributions. required, or if they were ‘contracted out’.
The DWP has issued guidance, saying: “You don’t get your State Pension automatically – you have to claim it. You should get a letter no later than two months before you reach State Pension age telling you what to do.”
Further clarifying the process, the guidance notes that individuals can claim their State Pension or choose to delay their claim, adding: “If you wish to defer, you do not have to to do anything. Your pension will be automatically deferred until now. you claim it.”, reports the Daily Record.
This means that if you do not respond to the letter confirming that you wish to start claiming the State Pension, you will not receive any payments as the DWP will indicate a lack of response as a wish to defer.
Postponing your State Pension could increase the payments you get each week when you decide to claim it, provided you put it off for at least nine weeks. Your State Pension increases by the equivalent of 1% for every nine weeks you defer, which equates to just 5.8% for every 52 weeks.
The extra amount is paid with your regular State Pension payment, but it’s important to note that any extra payments you receive from the deferral may be taxed – find out more on GOV. UK here.
It is also important to know that deferred State Pensions rise each year in line with the September Consumer Price Index (CPI) inflation rate and the highest measure of the Green Third policy.
New State Pension payment rates 2024/25
Basic State Pension payment rates 2024/25
Your first payment
Your first payment will be within five weeks of reaching State Pension age and you will receive a full payment every four weeks thereafter. You may receive part of your payment before your first full payment.
The letter will tell you what to expect.
You can also choose to receive your State Pension payments weekly or fortnightly, resulting in a shorter delay to the first payment.
State Pension payment day
The day your State Pension is paid depends on your National Insurance number.
The last two digits of your National Insurance number:
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00 to 19 – paid on Monday
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20 to 39 – paid on Tuesday
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40 to 59 – paid on Wednesday
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60 to 79 – paid on Thursday
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80 to 99 – paid on Friday
The DWP’s ‘starting amount’ for the new State Pension
If you have qualifying years on your National Insurance record as at 5 April 2016, the DWP calculates a ‘starting amount’ for you for the new State Pension.
It is the highest of either:
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the amount you would have received under the previous State Pension system up to 6 April 2016, or
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the amount you would have received on your record until 6 April 2016 if the new State Pension had been in place at the start of your working life
Both sums take into account any periods when you were contracted out of the Supplementary State Pension. Your ‘starting amount’ could be less than, more than or equal to the new full State Pension.
If your ‘starting amount’ is less than the total amount of the new State Pension
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Every ‘qualifying year’ you add to your National Insurance record after 5 April 2016, a certain amount (around £5.82 a week, this is £203.85 divided by 35) will be added to your ‘starting amount’, until you the full amount out. of the new State Pension or if you reach State Pension age, whichever occurs first.
If your initial size‘ more than the total amount of the new State Pension
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You will receive this higher amount when you reach State Pension age. You can have a starting amount higher than the full new State Pension if you have several Additional State Pensions. The difference between the new full State Pension and your ‘starting amount’ is called a ‘protection payment’.
If your ‘starting amount’ is the new full State Pension
How can I find out how much State Pension I could get?
You can get the State Pension forecast online from the Check Your State Pension service here. This provides personalized information, including your State Pension age, an estimate of how much State Pension you may receive at that point and if you can increase this amount.
It also allows you to view your National Insurance contribution history. More details about deferring your State Pension can be found on the GOV. UK website here.
