DWP urges State Pension claimants to act quickly to avoid potential payment delays

The Department for Work and Pensions (DWP) has published figures which show that the State Pension currently supports 12.7 million older people in the UK – with more than a million of these pensioners in Scotland. The State Pension serves as regular financial support for those who have reached the eligible retirement age of 66 for both men and women and have contributed at least 10 years to National Insurance.

However, those approaching retirement age this year may not be aware that the State Pension, considered a contributory benefit, is not automatically issued by the DWP. Instead, it must be actively claimed, otherwise new pensioners could experience a delay in receiving their initial weekly payment of up to £221.20, which amounts to £884.80 for each four-week period.

The reason the funds are not automatically awarded when they reach state pension age is that some people choose to delay applying to continue working and build up their pension savings, particularly if they are under 35 national insurance contributions or were “contracted out”, the Daily Record reports. The DWP has provided guidance stating: “You don’t get the State Pension automatically – you have to claim it. You should get a letter at least two months before you reach state pension age telling you what to do.”

The guidance goes on to explain that you have the option of either claiming your State Pension or delaying (postponing) claiming it. It notes: “If you want to postpone, you don’t have to do anything. Your pension will automatically be delayed until you request it”.

This means that if you don’t reply to the letter confirming you want to start receiving State Pension, no payments will be made as the DWP will assume you want to defer. By deferring your State Pension, you could increase the amount you receive each week when you eventually claim it, provided you defer for at least nine weeks. The State Pension increases by around 1% for every nine weeks you defer, equivalent to just under 5.8% for a whole year.

The extra amount is included in your regular State Pension payment, but it’s important to note that any extra deferral money may be subject to tax – more details can be found on GOV. UK. It’s also crucial to note that deferred state pensions rise annually based on September’s consumer price index (CPI) inflation rate, rather than the highest measure of the Triple Lock policy.

The new state pension payment rates for the 2024/25 financial year are set at:

– Full payment rate: £221.20.

– Every four week pay period: £884.80.

The basic state pension payment rates for 2024/25 are:

– Basic State Pension category A or B (full rate): £169.50.

– Every four week pay period: £678.00.

Details of the first payment are also included.

Your first payment will be within five weeks of reaching State Pension age and you will receive a full payment every four weeks after that. You may receive part of a payment before the first full payment.

You can also choose to receive your State Pension payments weekly or fortnightly, which will result in a shorter delay for your first payment. The day your state pension is paid depends on your national insurance number.

The last two digits of your National Insurance Number:.

00 – 19 – is paid on Monday.

20 to 39 – paid on Tuesdays.

40 to 59 – paid on a Wednesday.

60 to 79 – paid on Thursday.

80 to 99 – paid Friday.

If you have qualifying years on your National Insurance record on 5 April 2016, the DWP calculates a ‘starting amount’ for you for the new state pension. It is the greater of:

– the amount you would have received under the previous state pension system until 6 April 2016, or…

– the amount you would have received on file by 6 April 2016 if the new state pension had been in force at the start of your working life.

Both amounts reflect the periods in which you were contracted from the supplementary state pension. The ‘starting amount’ can be less, more or equal to the new state pension.

For each ‘qualifying year’ you add to your National Insurance record after 5 April 2016, a certain amount (around £6.32 per week, which is £221.20 divided by 35) will be added to your ‘amount starting’ until you reach the new full state pension or reach state pension age, whichever comes first.

The difference between the new full state pension and the ‘starting amount’ is called the ‘protected payment’. If the ‘starting amount’ is equal to the new full state pension, you will receive the new full state pension when you reach state pension age.

You can get a State Pension forecast online via the Check State Pension service. This provides tailored information including your State Pension age, an estimate of the State Pension you may receive at the time and whether you can increase this amount. It also allows you to review your National Insurance contribution history.