State pension UK: How you could increase your retirement income by £3,000 a year

State pension UK: How you could increase your retirement income by £3,000 a year

“The state pension for 2020/21 is £175.20 a week for anyone retiring on or after April 2016. This is annual income of £9,110.40.

“So, using 2020/21 entitlements, if you defer for a year, you would get £10.16 extra a week when you do take it, bringing the weekly amount up to £185.36 and the annual income up to £9,638.72.

“If you were to defer another year, you would get another 5.8 percent extra a week.

“If you deferred taking your state pension until you were 70, the amount you’d receive would go up to just over £12,000, which is still under the current annual allowance of £12,500 so you wouldn’t pay income tax, but is a significant increase on the £9,110.40 you’d be getting without deferring.”

These broad calculations look only at the state pension and don’t take into account increases to the state pension or changes to personal tax thresholds.

“If you don’t want to carry on working full time, you could also think about dropping to part-time, or doing something else; SunLife’s research reveals that 15 percent of over 65s are still working, but most are either part-time or working for themselves.

“For example, the National Living Wage is £8.72 per hour.

Published at Sun, 31 May 2020 03:01:00 +0000