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Should I take my state pension or delay?

Updated 03 December 2020

2min read

Nick Green
Financial Journalist

Prince Charles is officially a pensioner today, but intends to donate his state pension to charity. Even if you don’t have that luxury, should you still take your pension when you reach 65? Jaskarn Pawar explains why you may want to wait.


With the government delaying paying the state pension more and more it would seem like an obvious thing to do to take it as soon as it becomes available to you.

While most people will be grateful for the extra money the state pension will promise them, and will grab it with both hands when it finally comes along, you may want to consider your options.

The government actually gives you three main options when you reach state retirement age:

1.     Take your state pension and enjoy yourself

2.      Delay your state pension and receive an increase of 1 per cent in your pension income for life for every five weeks you delay taking it

3.      Delay it by more than a year and receive the income that has been accumulated over that time period as a lump sum, plus interest of 2 per cent above the Bank of England base rate.

Naturally different people will be in different financial positions and so choosing an option that complements your requirements is important.

With people remaining far more active in retirement and working longer it may be relevant for some to consider delaying their pension. If you are still generating an income for yourself and would not expect to rely on the state pension for your spending, then you might consider delaying it until you cease working.

This will help to increase the income you do receive when you come to take it, for life. Delaying it by a year will increase your state pension by 10.4 per cent. So if you are thinking of living for a long time and certainly well in to retirement this could work out well for you.

The options are interesting and it should not be taken as a given that you have to take your state pension when you reach retirement age.

 Find a financial adviser to discuss the right route for your retirement.

About the author
Nick Green is a financial journalist writing for Unbiased.co.uk, the site that has helped over 10 million people find financial, business and legal advice. Nick has been writing professionally on money and business topics for over 15 years, and has previously written for leading accountancy firms PKF and BDO.