State pension UK: Error sees man get a shock lump sum of £140,000 – could you get payout?

In order to get the state pension, eligible people must have reached state pension age. However, that’s not to say that they need to claim the payment immediately once they reach this time of life.


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Rather, it is possible to defer claiming the state pension – and this is simply done by not claiming the payment.

While it won’t be an option for everyone, by deferring the state pension for a certain period of time, the amount can increase.

The rules on this differ depending on whether it’s for the basic state pension or the new state pension.

And, for some, it can mean that when it does come to claiming the state pension, they can receive a greater amount that they would have been forecast to get in a month.

It’s something which one man has recently discovered, after he went years without claiming his state pension – having mistakenly assumed he wasn’t able to.

The man, who is now in his 80s, had thought that because he had continued for years after reaching retirement age, he wasn’t able to claim the state pension.

However, this error has since come to light, and the man is now set to recieve more than a decade’s worth of payments.

Due to him being able to claim the basic state pensiion, the man will receive a lumpsum payout, amounting to £140,000.

The discovery came after Wakefield Council made inquiries on the man’s behalf.

In a report, councillor Michael Graham said: “To help our residents get more money in their pocket, we are using information we hold to identify if they are entitled to more benefits and allowances than they are getting.

“One particular resident, an elderly gentleman in his 80s, who was in credit with his council tax but wasn’t claiming the correct benefits.

“The gentleman is still working and didn’t want to stop but didn’t realise he could claim his state retirement pension and continue to work.


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“We contacted the pension service, who looked into it and told the gentleman that he was due a backdated lump sum of £140,000 as well as an extra £185 a week.”

Accoridng to the Local Democracy Reporting Service, the man, has opted to remain anonymous, BBC News reports.

Delaying (deferring) the state pension

If one reaches state pension age on or after April 6, 2016

Provided these people defer for at least nine weeks, their state pension will increase for each week they defer.

The increase to the state pension will be by the equivalent of one percent for every nine weeks they defer – working out at just under 5.8 percent for every 52 weeks.

This extra amount will then be paid with the regular state pension payment, once it is claimed.

If one reached state pension age before April 6, 2016

People in this situation can usually take their extra state pension either as a one-off lump sum or as higher weekly payments.

When it comes to them claiming the deferred state pension, they will get a letter asking how they wish for it to be taken, with these people having three months from recieiving the letter to decide.

Higher weekly payments

Provided a person defers for at least five weeks, the state pesnion will increase each week it is deferred.

Those who opt for higher weekly payment can see their state pension increase by the equivalent for every five weeks they defer.

This works out at 10.4 percent for every 52 weeks, and it is then paid with the regular state pension payment when the time comes.

Lump sum payment

Alternatively, it’s possible to get a one-off lump sum payment, should a person defer claiming the state pension for at least 12 months in a row.

This will include interest of two percent above the Bank of England base rate.

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