Deferred State Pension Calculator

If you defer (delay) claiming your new State Pension, it increases by 1% for every 9 weeks you defer — equivalent to approximately 5.8% per year. There is no maximum deferral period. The extra pension is paid on top of your regular pension when you eventually claim. Deferral is only available under the new State Pension rules (from April 2016). The increase is not compounded.

It depends on how long you live. The break-even point for a 1-year deferral is approximately 17 years. If you defer for 1 year at age 66 and live beyond 83, you come out ahead. If you have other income sources and are a higher-rate taxpayer, deferring can reduce your tax burden during the deferral period. However, you lose the income during the deferral period, which has an opportunity cost.

Yes. There is no requirement to stop working to receive or defer your State Pension. If you are still working and earning well, deferring can make sense because: the deferred pension is not means-tested, you avoid paying tax on pension income during high-earning years, and the 5.8% annual increase is competitive compared to investment returns.

If you die while deferring, your estate or surviving spouse/civil partner may be entitled to: a lump sum equal to the deferred pension amount (under old rules), or an inherited increased pension (under new rules). The exact entitlement depends on when you reached State Pension age and your marital/civil partnership status. It is important to understand these rules before deferring for extended periods.

Yes, the additional pension from deferral is taxable as income. It is added to your other income for the tax year. If deferral pushes you into the higher-rate tax bracket (40%), the net benefit is reduced. This is an important consideration — a 5.8% gross increase becomes approximately 3.5% net for a higher-rate taxpayer.