bats

I've looked at previous thread but they don't seem to apply to the new pension which is for people who reach state pension age on or after 6th April 2010. I maybe wrong of course, so apologies if the answer is already out there.

I am now able to collect my state pension but have been delaying this as I understood that as long as you deferred the pension then you got the annual increases and could also increase the pension by 5.8% for each year that you defer. However recent online reading makes me wonder if this is the case.

This is from the Gov.UK website

edit
Government Gateway only mentions that annual increases are not available for some who live abroad

'If you move abroad

If you move to any of the countries in this list, the rules for deferring are the same as in the UK:

• European Economic Area (EEA) countries
• Switzerland
• a country that the UK has a social security agreement with (except Canada or New Zealand)

If you move to a country that is not in the list, the extra payment you get will stay the same. It will not go up or down over time.

If you reach State Pension age on or after 6 April 2016

If you move to a country that is not in the list, your extra payment will be based on the State Pension you’re owed at whichever is later of:

• the date you reach State Pension age
• the date you move abroad'

Clear as mud to me.

Anyone understand??

Pulaski

If you're in Canada then you are in one of the two countries that are an exception to the first heading (... same as the UK), so no, you are not accruing an increased pension amount by delaying drawing your UK State Pension.

BristolUK

So we have two issues.

• Increasing the regular amount by deferring the application
• Having the usual annual increases/uprating

I'm reading your question as if being in Canada one would not ordinarily receive the annual increases but by deferring there would be a loophole by which one could qualify for the annual uprating as well as the increase due by deferring. Or at least for the uprating up to the point of the application.

It looks like that was the case before but not now. I am making the following figures up just as examples.

I think what it's saying is that before 2016 - let's say 2013 and if the RP rate was £150 when you could claim it, followed by £155 in 2014 and then £160 in 2015, then you could delay claiming it by 2 years until 2015. The 5.8% increase would be based on the new current rate of £160, the same as it would have been in the UK. (But not getting annual increases thereafter in Canada)

From 2016 I believe it means that with an RP rate of £165, followed by £170 in 2017 and £175 in 2018, £180/2019, £185/2020 and that if you could have claimed it in 2018 when it was £175 but that you defer until 2020, your extra will be 5.8% based on the original £175 rather than the current £185.

Pulaski

But per what Bats quoted, Canadian residents don't get the deferral increases - Canada is an exception in the first section of the rules she quoted.

BristolUK

It doesn't say that. It says:
It says there is an extra payment but that for people after 2016 it is based on the rate at either of those two dates, as I said in the second part of my example. It still says extra amount so it cannot be no change, can it.

It's important to differentiate between extra amount and increase.

For these purposes Increase is the annual uprating which people in Canada do not get.
The Extra amount is the additional amount (the 5.8%) one gets for deferring and it says people after 2016 do get the extra amount it's just a different extra amount than it used to be.

That's the way I'm reading it. How can they refer to an extra amount if it stays the same?

Pulaski

You may be right, but I read the "extra amount" wording that you requoted to mean that that was the date that the amount stopped incrementing i.e. it stopped incrementing at the date you moved abroad (to a non-incrementing country).

I think your interpretation makes more sense, but I wouldn't stake my life on it.

bats

I read it that one does get annual cost of living increase before you start taking the pension, but once you do start taking it then it does not increase.
Also that ir is no longer possible to defer and so increase your pension.

I have written and asked about this but replies are not speedy in the time of COVID

Siouxie

Let us know what they say please bats - I was planning on deferring mine to increase it a little.. interested to hear what they say, thanks

bats

I will do. Though I read something this morning about more changes being made to pensions to try and get back some of the COVID spending which is worrying. My UK pension has been eroded so many times already i dont want another..

Pulaski

It just seems to be a think tank "suggestion" at the moment - that the rate at which state pensions increase could be reduced, slightly, but that won't impact you if you live in Canada as pensions paid to residents of Canada don't increase anyway.

bats

Update
My reply from UK Pensions says that the pension is frozen to the rate in force at the date you are able to collect. If you defer and collect the pension is still frozen at the rate in force at the time you can collect.

Barstewards

Revin Kevin

Well that's a bit rubbish to say the least! And what is the logic behind two Comonwealth Countries, Canada and New Zealand being excluded from the agreement while the likes of the USA aren't? Is it that Canada and NZ won't play ball?

Pulaski

I don't think there's any logic, at best there are excuses, and I have never understood what the country of residence has to do with a specific arrangement between [1] a person who at some time in their life has lived and worked in the UK, and [2] the British government, because AFAICT whether or not I qualify for a British state pension has no bearing, literally zero, on my eligibility for US social security (i.e. the US state pension), so why I get deferral increases, and annual increases thereafter, when residents of Canada do not, is a mystery to me, and I am sure, to many others.

scot47

There was a court action raised by a group of pensioners resident in South Africa, It went to The House of Lords. Their Lordships said the UK Government was acting legally in doing this. The frozen pensions remain frozen.

bats

it's the UK govt that won't play ball as you put it. I knew that the pension woukd never increase but I had hoped to be able to delay taking it to get some increases. There are many posts and threads on here about frozen pensions btw., have a look.