When can I claim the basic State Pension?

The pensionable age for men is 65. For women it is between 60 and 65 depending on your age as an increase from 60 to 65 is being phased in. You can find out your own retirement age here.

When you reach your State Pension age you can put off claiming it if you wish. In return you will get either a lump sum when you do start to claim or a higher pension.

It's important here to understand the difference between retirement age and pension age, as the terms are often confused.

• your retirement age is when you stop working - it's a somewhat slippery concept as of course you can retire from one job, and then take another, perhaps part time. There is therefore no fixed retirement age for people, but some jobs may have a retirement age. You may then have no choice about continuing to work for that employer, though you are free to work elsewhere if you can find a job. (You may be able to challenge a fixed retirement age on age discrimination grounds.)
• your pension age is when you start to be paid a pension. You can stop working before your pension age, or carry on working after claiming a pension. There is nothing to stop someone being paid a private, occupational or state pension from working as well. While salary related schemes can sometimes have a pension age, the term is mainly used to talk about the age at which you can start to be paid the state pension.

At state pension age you can:

• claim your full State Pension (whether or not you are still working). The state pension is taxable so if you are working or have any other taxable income you may find that some of it goes in tax. This may be an argument for claiming it later.
• defer taking your state pension (whether or not you are still working). If you do this you can get a bigger state pension or a lump sum when you do eventually claim it.

Not surprisingly the longer you put off claiming State Pension, the more you get, and you need to defer for at least 12 months to get a lump sum, but only five weeks to get a bigger weekly pension.

You get an 1% extra State Pension for every five weeks you put off claiming (this works out at about 10.4% extra for every year you defer).

When the state pension is uprated you will in turn get a bigger increase, so that the percentage gap between what you are paid and what you would have been paid if you had claimed your pension at the earliest opportunity is maintained.

To get a lump-sum payment you have to put off claiming for at least a year.

The lump sum is based on the amount of normal weekly State Pension you would have received, plus interest.

The interest rate used to work out your lump sum is 2% above the Bank of England's base rate (so if the base rate was 4.5%, the rate of interest would be 6.5%). As the Bank of England base rate may change from time to time, the rate of interest used to calculate the lump sum can also change.

There are some worked examples on the Pensions Service website and also a detailed pdf for download.