DWP alert as many people set to see Pension payment delays this year

Some elderly people due to retire this year may experience delays in their first Pension payments.

The latest data from the Department for Work and Pensions (DWP) shows that the State Pension is currently a lifeline for 13 million seniors across the country.

Eligibility for this financial support kicks in when individuals hit the UK Government's designated retirement age, which is now 66 for both genders, provided they've paid into National Insurance for at least a decade. However, those nearing retirement may not realise that the State Pension isn't handed out automatically by the DWP but is a contributory benefit.

To avoid delays in getting their hands on the weekly sum of up to £230.25, or the four-weekly amount of £921.00, pensioners must actively apply for it.

Not everyone receives their State Pension as soon as they're eligible; some choose to delay claiming it to keep working and increase their pension pot, especially if they haven't built up the full 35 years of National Insurance Contributions or were 'contracted out', reports the Daily Record.

The DWP advises: "You do not get your State Pension automatically - you have to claim it. You should get a letter no later than two months before you reach State Pension age, telling you what to do."

The guidance further clarifies that people have the option to either claim their State Pension or opt to delay (defer) receiving it. It states: "If you want to defer, you do not have to do anything. Your pension will automatically be deferred until you claim it."

This suggests that if you ignore the letter asking you to confirm your wish to start receiving State Pension, the Department for Work and Pensions (DWP) will take it as a sign that you prefer to defer.

Choosing to defer your State Pension can result in increased weekly payments when you decide to claim it, on the condition that you defer for at least nine weeks. For every nine weeks of deferral, your State Pension will grow by approximately 1%, which translates to nearly 5.8% over a full year.

Any additional amount accrued from deferring is paid alongside your regular State Pension payment, but bear in mind that these extra sums could be subject to tax - more details can be found on GOV.UK.

It's also vital to recognise that the growth rate of deferred State Pensions is based on September's Consumer Price Index (CPI) inflation rate rather than the highest measure provided by the Triple Lock policy.

State Pension payments

Full New State Pension

• Weekly payment: £230.25
• Four-weekly payment: £921
• Annual amount: £11,973

Full Basic State Pension

• Weekly payment: £176.45
• Four-weekly payment: £705.80
• Annual amount: £9,175

Your first payment

You'll receive your initial payment within five weeks of reaching State Pension age, followed by full payments every four weeks thereafter. There may be a partial payment before your first complete one.

The letter will outline what you should anticipate.

You have the option to receive your State Pension payments on a weekly or fortnightly basis, which could result in a shorter wait for your first payment.

DWP 'starting amount' for the new State Pension

If you have qualifying years on your National Insurance record as at 5 April 2016, DWP calculates a 'starting amount' for you for the new State Pension.

This will be the higher of either:

• the amount you would have got under the previous State Pension system up to 6 April 2016, or
• the amount you would get on your record to 6 April 2016 if the new State Pension had been in place at the start of your working life

Both amounts take into account any periods when you were contracted out of the Additional State Pension. Your 'starting amount' could be less than, more than or equal to the full new State Pension.

If your 'starting amount' is less than the full amount of the new State Pension

• Each 'qualifying year' you add to your National Insurance record after April 5, 2016 will add a certain amount (about £6.57 a week in the 2025/26 financial year, this is £230.25 divided by 35) to your 'starting amount', until you reach the full amount of the new State Pension or you reach State Pension age, whichever happens first.

If your 'starting amount' is more than the full amount of the new State Pension

• You will get this higher amount when you reach State Pension age. It is possible to have a starting amount higher than the full new State Pension if you have some Additional State Pension. The difference between the full new State Pension and your 'starting amount' is called your 'protected payment'.

If your 'starting amount' is equal to the full new State Pension

• You will get the full new State Pension when you reach State Pension age.

How can I find out how much State Pension I could get?

You can obtain a State Pension forecast online from the Check your State Pension service here. This provides personalised information, including your State Pension age, an estimate of how much State Pension you may get at that point and if you can increase this amount.

It also allows you to view your National Insurance contribution history.

More information about deferring your State Pension can be found on the GOV.UK website here.