Reader Question: Will deferring my State Pension affect my benefits? Is there any point?

1 min Read Published: 09 Sep 2011

Get an answer to your financial question onlineReader Question:

I am 61 years old and have deferred my state pension as I am still working full time. However I have no other pension and do not own my property, therefore I will be on benefits when I stop working, and my increased pension will be taken into account when I make a claim. Is there any point in deferring as I am not sure that I will benefit?

I await your reply.

My response:

You are right in that a deferred pension is taken into account when assessing eligibility for some means-tested benefits. But how it is also depends in what form you eventually take the pension (either in the form of a lump sum or as an increased state pension). For example if you decide to tax an increased state pension it will affect your entitlement to Housing Benefit, Council Tax Benefit or Pension Credit. However, it is ignored if you take it as a lump sum payment. So in theory it is still possible to benefit.

But in order to answer your question on whether it is worth you personally still deferring you need to know

a) what benefits you may be entitled to

b) how they will interact with a deferred state pension

As I do not know your full circumstances (ie how much state pension you will be entitled to or whether you have savings) I can't give you a definitive answer. Fortunately there is an official and easy to use online tool called Benefits Adviser which can give you a definitive answer. Simply answer questions anonymously about your income and outgoings and it will tell you the benefits you may become entitled to.

Once you have worked out what these benefits will be read the Department for Work & Pensions Official Guide to State Pension Deferral (in particular page 19) which details exactly how deferred state pension affects other benefits.

Finally, if you are still a little confused contact the Citizens Advice Bureau. They provide free, independent, confidential and impartial advice. If you call them and relay full details of your circumstances they will talk through your options. The  service they provide is fantastic.

Here is a link to the Citizens Advice Bureau contact details.

I hope that helps


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  1. Dear Sirs

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