The number of people who opt to defer their state pension has fallen to the lowest level for 20 years, according to new figures from the Department of Work and Pensions.
Just one in 12 people who reach the state pension age chose to defer taking this benefit. This figures has fallen from one in nine in 2004.
Many pension experts said this fall was not surprising, given the uplift rate paid to those who defer has been cut, and the rise in the state pension age, particularly for women.
Since April 6 2016 those deferring receive 1 per cent more income for every nine weeks they defer, equal to a return of nearly 5.8 per cent extra for every year deferred.
For someone on full State Pension of £168.60 a week, that would boost their annual income by £500 for every year deferred.
However those reaching SPA have to factor in the cost of these ‘lost’ benefits and calculate how long they would have to live to effectively claw this back through the higher payments.
Just Group’s communications director Stephen Lowe says: “The biggest recent change was alongside the introduction of the New State Pension in 2016 when the returns were made less generous. Even so, in today’s low interest rate environment they remain relatively healthy, particularly as the extra income is uprated with Consumer Price Index inflation.
“In general, deferral could work well for those in good health who are perhaps still working or who find that their State Pension income pushes them into a higher tax band than necessary.”