Citizens Advice Bureau's district manager David Gooding on....pensions

CAB district manager David Gooding writes for the Observer

14 July 2008

THE bureau receives frequent enquiries from people who have decided to stay on at work beyond their retirement age and want to know whether they have to claim their retirement pension straight away.

The answer to this is no. When you reach state pension age you may not need the income from your pension immediately so if you intend to carry on working you can decide whether to claim or defer it.

If you claim state pension while you carry on working your earnings will not affect the amount of state pension you get, but state pension does count as income for tax purposes, so claiming it may well affect the amount of tax you have to pay.

But you may decide to put off claiming it for a while to get either extra state pension or a one-off taxable lump-sum payment when you do claim.

If you decide to put off claiming state pension, your options will depend on how long you put it off for.

The longer you put it off the more you will get; for every five weeks you defer claiming you build up an extra one per cent on top of your normal weekly rate.

To get a lump sum payment you have to put off claiming for at least 12 months continuously.

You do not need to tell the Pension Service which option you prefer until you finally claim your state pension. The choice is yours and will depend on your circumstances and wishes.

For information on the web you can visit www.adviceguide.org.uk or the Pension Service at www.thepensionservice.gov.uk or you can contact Rugby Citizens Advice Bureau on 01788 541000.
David Gooding, manager, Rugby and District CAB

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