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Fidelity: Savers miss out over failure to defer state pension


Less than one in ten savers are taking advantage of bonuses for deferring their state pension, data from Fidelity reveals.

According to a freedom of information request submitted by the firm, 92 per cent of those starting to draw their state pension in the six months to February 2014 were doing so at their first opportunity.

Retirees can receive a 1 per cent uplift in their state pension income for every five weeks of deferral, equivalent to a 10.4 per cent increase for a year.

Fidelity suggests 60 per cent of retirees have sufficient savings to fund some kind of deferral, with a year estimated to require a nest egg of £6,970, and a two-year deferral generating an additional £18,800 over the lifetime of a retiree.

Fidelity retirement director Alan Higham says awareness of the option to defer needs to be raised, particularly in light of pension freedoms.

He says: “The new pension freedoms would now allow someone to suspend or defer taking their state pension for many years whilst they draw down on their private pension and this option should be discussed with people as they are given guidance on their pension choices.

“It won’t be suitable for everyone (especially those with seriously poor health) but given the very low numbers of people choosing this option, there is a big job to be done in raising public awareness.”



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Senior Tory backbencher and former defence secretary Liam Fox has said the triple lock on the state pension is “difficult to explain” to young families. In an interview with the Spectator, Fox questions his party’s spending commitments and warns the state pension promise will “come back as a very big cost, an unexpectedly large cost”. […]

Pension-Pensions-savings-retirement-piggy bank

Is the state pension triple-lock really affordable?

Uniform political support for a triple-lock on state pensions does not reflect a flawed policy that could cost the Exchequer £15bn a year, according to experts. All of the major parties backed the triple-lock in the build up to the election and the policy is therefore likely to continue following the Conservatives’ victory last week. […]


Malcolm McLean: Is there a future for the state pension?

Pensions have not featured massively in this year’s election debates, although on other occasions, for older people at least, this has usually been an issue that has materially influenced voting intentions. This is especially so when it comes to the level and sustainability of the state pension. This year’s election has seen politicians of all […]


JO Hambro poaches F&C’s Ulrich for Wood’s UK fund

JO Hambro Capital Management has hired former F&C manager Michael Ulrich to work alongside John Wood on the UK Opportunities fund. Ulrich will work alongside lead fund manager Wood, fund manager Rachel Reutter and analyst Todd King on the £1.6bn UK fund. He joins in mid-August. He left F&C in April this year, where he most recently […]

Japan: the Land of the Rising Dividends

By George Boyd-Bowman, Fund Manager at Neptune Many Western investors have long bemoaned the lack of a true dividend culture in Japan, claiming the corporate culture is not tilted in favour of shareholders. Yet today, in the Land of the Rising Sun, we see a fresh impetus to focus on shareholder returns, which is leading […]


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There are 4 comments at the moment, we would love to hear your opinion too.

  1. Take an example of 5 years’ deferral. When retirees take into account that it might take around 16 years (currently to age 81) for State Pension deferral to bear fruit (when the income given up over the deferral period is caught-up), they might not share the enthusiasm for deferring. (And it will be worse under the new State Pension rules.)

  2. Sorry Mark but I can’t agree your figures. 5 year deferral results in a loss of 5 years pension followed by 152% of original pension plus indexation. 10 years plus is more like it. Can’t see what assumptions you are making to get to 16 years. Anyway the whole thing is dead now with the reduction next year from 10.2% for future deferrals.

  3. John – I suspect you are working on 10 years from commencement of the deferred income. I am referring to 16 years from the point when the advice to defer is given as this is how it would be expressed to the retiree at the point of advice. So not that different after all. Glad we agree on the final point though. 🙂

  4. Christopher Hallam 10th June 2015 at 3:39 pm

    In my opinion the far more interesting option here involves taking the deferred pension as a lump sum. This removes any risk of not benefitting from the increased pension should the retiree die and has the potential to massively reduce your tax bill in the year the lump sum is taken.

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