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Putting off claiming your State Retirement Pension

You cannot put off claiming your State Retirement Pension if you reach state pension age on or after 6 April 2016.

The following information is for people who have reached state pension age before 6 April 2016 only.

You can put off claiming your State Pension, when you reach State Pension age, so that you can get more State Pension when you do claim. 

If you are already claiming State Pension, you can decide to stop your claim and earn extra State Pension or a lump sum. You can only do this once and you must be normally living in the Isle of Man. 

You are able to put off claiming your State Pension for as long as you want to build up either extra State Pension or a lump sum. 

If you want to put off claiming your State Pension the following choices are available:

Earn extra State Pension 

You can choose to get extra State Pension of around 1% of your normal State Pension for every continuous 5 week period you do not claim it, but you will not get any State Pension for the weeks you give it up. This means that if you put off claiming your State Pension for a year it will be 10.4% higher. The extra State Pension will be paid for the rest of your life and will be increased by the same rate as the rest of your State Pension. 

A one-off taxable lump sum payment 

You can get a lump sum as an alternative to the extra State Pension if you put off claiming for at least 12 consecutive months. The lump sum will be based on the State Pension you would have got if you had claimed it at State Pension age, or the date you put off claiming it, plus added interest. The rate of return will be based on the Bank of England’s base interest rate, plus 2 percentage points. You can receive the lump sum at the time you claim your State Pension or in the following tax year. You will get your normal State Pension from the time you claim. 

You have to put off claiming your State Pension for at least 12 months to be able to choose a lump sum. If you put off claiming your State Pension for less than 12 months you may still get an increased weekly amount of State Pension. Or you could choose to have arrears of State Pension paid back to you in one payment – without any extra interest. This is known as backdating. 

Once you decide to claim your State Pension, depending on how long you put off claiming, you will have the choice of extra State Pension, a lump sum or backdating your claim. 

  • If you put off claiming your State Pension for at least 5 weeks, you may get extra State Pension.
  • If you have put off claiming your State Pension for at least 12 months, you have the choice of extra State Pension or a lump sum.
  • If you put off claiming your State Pension for less than 12 months you can get a one off payment, based on the amount of State Pension you have put off claiming but without interest. 

If you decide to backdate your claim for State Pension, it will reduce the amount of extra State Pension or lump sum you could get. 

If you are thinking about putting off your claim, you may want to get independent financial advice. You may have to pay for this. 

What else do I need to know? 

If you are getting certain other benefits at the same time as you are putting off claiming your State Pension, the days you are getting these other benefits will not count towards any extra weekly State Pension or lump sum. These benefits include Widow’s Benefit, Carer’s Allowance, Widowed Mother’s Allowance and Severe Disablement Allowance. This list is not exhaustive. 

You may have to pay income tax on income from the State Pension you get. 

If you decide to take the extra State Pension, the extra money will be taxable too. It will also be taken into account for Income Support. The lump sum will not affect your claim for Income Support. 

What do I have to do? 

If you are thinking about putting off your claim to State Pension and you require more information, please contact:

Pensions Group

Telephone:+44 1624 685176

Email:Send Email

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