People who choose to take their state pension late could, after five years get a one-off payment of over £30,000 revealed Secretary of State for Work and Pensions, Alan Johnson, at the publication of the department's Five Year Strategy.
Mr Johnson said the government was keen to ensure older workers could make the choice about how and when they retire. The ability to defer would be central to this aim and would help encourage people who wanted to work past the state pension age.
The option becomes available from April and further information on the subject for people approaching state pension age was published for the first time today.
This new choice is just one of the ways in which the government plans to ensure that at least 1 million more older people are in work. Other steps include legislating to tackle age discrimination and tax reforms so people can keep working after drawing their occupational pensions.
The Five Year Strategy set out details of what a person could expect to receive if they deferred a state pension of £105 for anytime over one year:
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£5,646 for one year
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£11,673 for two years
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£32,306 for five years
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£77,090 for ten years
Those who choose to defer can instead receive it as an increased weekly amount added to their pension when they finally claim. Someone with a full basic state pension at this April's rate of £82.05 will be able to get a weekly pension of:
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£90.58 if they defer for one year
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£99.12 if they defer for two years
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£107.65 if they defer for three years
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£116.18 if they defer for four years
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£124.72 if they defer for five years
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