DWP handing state pensioners free £666 OR £916 after Winter Fuel Payment axe

DWP handing state pensioners free £666 OR £916 after Winter Fuel Payment axe

by · Birmingham Live

State pensioners are being handed a free £916 with a little-known top-up rule. A little-known deferral rule could add an extra £916 into pensioners' pockets if they put off collecting their pension for a year, the Department for Work and Pensions ( DWP ) says.

At age 66, people are eligible to claim the state pension but this is set to rise to 67 in 2028, and eventually, 68 by 2048, meaning many people's retirement will be cut shorter and shorter. You will have to work for longer, or rely on a private or workplace pension to get by until then if you want to retire before the stated age.

However, there is a little-known rule that could add a £916 top-up to your pension pot - you can defer it. If you choose to defer your state pension by a year, the total you’re paid when you do collect it will increase. For every nine weeks you delay taking your state pension, the payout rises by one percent, which adds up to a 5.8 per cent boost per year, or £666.

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It comes after the Winter Fuel Payment was axed. This rule currently applies to those on the New State Pension, which is currently £221.50 per week and will rise each year in line with the much-debated Triple Lock. Those who reach state pension age after April 6 2016 will be eligible for the deferral boost, benefitting those born after 1949.

The government explains: “You do not 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.

“You can either claim your State Pension or delay (defer) claiming it. If you want to defer, you do not have to do anything. Your pension will automatically be deferred until you claim it.” For those on the old pension, born before 1949 could get an extra 10.4 percent added to their £169.50 state pension per week, making for a total of £916 extra per year deferred.