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By: Ikedi Ani-okoye

Basic State Pension

This pension could be for you if you have paid, been treated as having paid, or been credited with National Insurance contributions for a certain number of years during your working life. The amount of State pension you receive w1ll depend on the number of years of contributions you have built up. you must normally have 10 or 11 years' contributions to get a minimum basic State Pension.

Putting off your Claim to State Pension

People have always been abLe to earn extra State Pension by putting off claiming their State Pension, either when they reach State Pension age, or by deciding to stop claiming it for a while. The amount of extra money you can earn depends on how long you put off claiming your State Pension. From April 2005 you :ould get around 1% extra State Pension for every five weeks you put off claiming - this means an extra 10.4% if you put off claiming for a year. lt is paid on top of your normal weekly State Pension when you eventually do claim.

This option was introduced in April 2005 as an alternative to a higher weekly State Pension for people who put off claiming for at least 12 nnonths.You can choose a one-off lump sum based on the amount of normal weekly State Pension you would have received, plus interest added each week and compounded.

This means that you will earn interest on the interest added on each week, as well as on the amount of weekly State Pension.The Interest rate IS broadly equivaLent to a yearly Interest rate of Z% above the Bank of England base rate. You also get your State pension when you eventuaLLy do claim it, paid at the normal rate.

CONCLUSION

You must first decide whether to claim your State Pension as soon as you reach State Pension age or whether to put off claiming it for a while. lf you decide to put off claiming your State Pension, when you do eventually claim, you then need to choose which option will suit you best.

The main difference between the two choices you witl have if you put off claiming your pension is that extra State Pension will give you a higher weekly State Pension for life from when you do claim it (although the normal rules on paying State Pension apply). However, the lump-sum payment is a one-off payment and you will get your normal State Pension once you do claim it. The choice i5 yours and will depend on your circumstances and wishes.