SOCIAL SECURITY BENEFITS/PENSIONS – STATE BENEFITS

Synopsis: The government have confirmed the deferral rate for the single tier state pension

Date posted: Thursday, July 24, 2014

Further to our bulletin in July 2013 Steve Webb has now confirmed in a written statement what rate the single tier pension will increase at, in deferral.

Earlier this year the Government Actuary was asked to provide a report on the actuarially fair rate of increments for those reaching state pension age on or after 6 April 2016 and choosing to defer their state pension beyond state pension age.

The proposed new rate will be one-ninth of 1% for each week the state pension is not claimed. This means a 1% increase for every nine weeks of deferral or around a 5.8% increase for each full year. The current rate is 10.4%.

Draft regulations are expected to be published later in 2014 under the powers in the Pension Act 2014, which will set out the proposed rate.

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