State pension UK: You could boost your state pension by hundreds - deferment explained

State Pension payments are received by millions of eligible people across the country, and can be an important entitlement. Many people will have built up decades of National Insurance contributions through hard work in order to receive their state pension in retirement. However, many pensioners will also be looking for ways to increase their sum further to ensure they have enough to see them through their retirement.

This is the case as long as the state pension is deferred for at least nine weeks.

The government explains the state pension increases by the equivalent of one percent for every nine weeks of deferral.

Overall this will work out as approximately 5.8 percent for every 52 weeks a person chooses to put off receiving their state pension.

Britons could also gain higher increases than this every year, as the state pension should also rise in 2021 and in the years to come.

This is due to the state pension Triple Lock Mechanism, which sees the full state pension sum rise by the greatest of the following three measures:

• Average earnings
• The Consumer Price Index (CPI) otherwise known as inflation
• 2.5 percent

The extra amount people will build up through deferring, will be paid out through a person’s regular state pension payments.

There are, however, different rules for those who reached state pension age before April 6, 2016.

These individuals fall under the ‘old’ or basic state pension scheme, and thus there is a different approach.

There is, however, an alternative approach, where Britons could receive a lump sum payment.

This will occur if a person defers claiming the state pension for at least 12 month in a row.

The government explains this will also include interest of two percent above the Bank of England base rate.

However, for individuals who choose the latter approach, it is important to note the tax implications of such a move.

People will be taxed at their current rate on a lump sum payment, for example, 20 percent if they are a basic rate taxpayer.