Pensions reductio

Pensions minister Steve Webb announced on 22 July that the annual state pension deferral rate will be reduced from 10.4% to 5.8% when the new state pension is introduced in April 2016 say Harris & Co accountants Northampton #accountantsnorthampton

Pensioners who choose to defer claiming their state pension when they reach state pension age may get extra state pension when they do eventually claim it. Currently, state pensions will increase by 1% for every five weeks that a claim is put off. This is the same as 10.4% for every full year putting off a claim.

The announcement means that state pensions will increase by 1% for every nine weeks of deferral or around a 5.8% increase for each full year.

A statement released by Mr Webb said: ‘It is my intention to bring forward draft regulations later this year, under the powers in the Pension Act 2014, which will set out the proposed rate. These regulations will be subject to the affirmative procedure.’