Section 16: Pensioner’s option to suspend state pensionSection 17: Effect of pensioner postponing or suspending state pensionSection 18: Section 17 supplementary: calculating weeks, overseas residents, etc
Sections 16 to 18 provide for arrangements to defer the payment of a state pension under the new state pension scheme.
In the current retirement pension scheme, individuals can choose not to claim their state pension at pensionable age or to give up their state pension for a period of time after they have started to receive it. As a consequence, they will qualify for either an increase to their weekly pension (known as increments) or for a lump-sum payment from the point they claim (subject to some conditions). This is known as deferral.
The basic principle of deferral is being retained for the new state pension, but only the ability to accrue a weekly increase. Those who reach pensionable age on or after the new state pension start date will not be able to accrue a lump-sum. The accrual rate of the weekly increase will be set out in regulations (see section 17(4)). There will be no inheritance of a weekly increase accrued by the deferral of a new state pension.