Sir Alex Ferguson, Britain’s most successful football manager, has announced his retirement this morning at 71 years old.
As Manchester United fans reflect on his 26 year tenure at the club, here at Informed Choice we are wondering if he decided to defer his State Pension when he reached his 65th birthday.
You can get extra money if you choose to defer your State Pension, either a higher pension income in the future or a lump sum payment.
A higher State Pension is available when you defer your pension for at least five weeks, with your State Pension increasing by 1% for every five weeks you defer. This is equivalent to 10.4% a year in additional State Pension, when you do eventually take it.
The lump sum option becomes available for those who defer for at least twelve months.
This one-off cash payment includes interest of 2% above the Bank of England base rate. It is subject to income tax at your highest rate.
Deferring your State Pension is a simple case of not claiming it when you reach your State Pension age.
Deciding whether it is financially advantageous to defer taking your State Pension and then to take it has a higher pension income or cash lump sum is often difficult.
The value of doing so will depend on your life expectancy, so it is a bit of a gamble at the time you make the decision.
Live for a long time after deferring your State Pension and then subsequently claiming it, and it can mean you are better off overall. Die earlier than expected and the decision to defer can mean missing out on State Pension income.
