Your State Pension

If you are nearing retirement, you probably can’t wait to get your hands on your state pension, after all you have waited a long time to get some money back from the government , so why not?

One reason that you may wish to reconsider is that until April 2016, pensioners who delay taking their state pension will receive a generous 10.4 per cent boost to state pension for every year deferred. So you only have to live for 9 years to benefit from the decision.

The rate is twice what you can expect in returns from investing in equities – and is guaranteed by the government. It might be an attractive proposition for someone in good health with substantial private savings to replace the state pension for the years they defer or who is willing to carry on working.

The obvious risk is that you die before taking your pension and miss out on the income that you could have taken.

Even if you have already started taking your state pension, you can suspend taking it and benefit from deferral increases.

It has been estimated that the optimum period is 7 years’ deferral. Just deferring for two years could net individual retirees an extra £19,000of guaranteed lifetime income.

Men born before 6 April 1951 or women born before 6 April 1953 are eligible for the 10.4 per cent deferral rate. But keep your decision to defer under review in case the terms change. Younger people will receive a less generous rate of increase for deferring state pension of 5.8 per cent.

Download a leaflet by clicking link – https://www.gov.uk/government/publications/deferring-your-state-pension

Ray Best is a resilient Financial Planner with a unique approach to investment planning, his work ethic has propelled him from humble beginnings to be voted as a top UK Financial Planner by Vouched For (as published in the Sunday Times). These days he works with families with large investment portfolios or big inheritance tax liabilities, the first step, is to book a Discovery Meeting HERE.

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