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DWP sets out the five-year plan for flexi-retirement

People who defer their state pension for five years will get a lump sum of over 32,000 under Department for Work and Pensions proposals in its five-year strategy on flexible retirement.

Secretary of State Alan Johnson’s plans will offer people the chance to continue working beyond state pension age from April. The plans are part of the Government’s initiatives to encourage at least a million more older people into work. Proposals also include legislation tackling age discrimination and reforming tax, allowing people to continue working after they draw their occupational pensions.

The five-year strategy details the amounts that people can receive by deferring their state pension. A pension of 105 per week could be swapped for a lump sum of 5,646 if deferred for one year, 11,673 after two years, 32,306 after five years and 77,090 if deferred for 10 years. Individuals can also boost their state pension by deferring payment. At current rates, a full basic-rate pension of 82.05 would be boosted to 90.58 by deferring for a year, rising to 124.72 if deferred for five years.

Pensions minister Malcolm Wicks says: “We are working towards ending the shame of perfectly capable workers being in work one day and then effectively out the next just because of their age. It is not about forcing people to work longer, far from it. Instead, we want the workplace and the state to be flexible enough that where someone wants to work and can do so we can accommodate this.

“We will face a number of challenges as our society changes and enabling people to extend their working lives is an important way of meeting this head-on.”

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