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New State Pension

Volume 584: debated on Tuesday 22 July 2014

I committed to publishing the proposed rate for increments derived from the deferral of a new state pension when I had advice on what would be an actuarially fair rate.

Earlier this year the Department commissioned the Government Actuary to provide a report on the actuarially fair rate of increments for those reaching state pension age on or after 6 April 2016 and choosing to defer their state pension beyond state pension age.

I am pleased to confirm the report has now been received from the Government Actuary. Following careful consideration of the information provided, the proposed new rate will be one-ninth of 1% for each week the state pension is not claimed. This means a 1% increase for every nine weeks of deferral or around a 5.8% increase for each full year.

It is my intention to bring forward draft regulations later this year, under the powers in the Pension Act 2014, which will set out the proposed rate. These regulations will be subject to the affirmative procedure.

In line with my commitment to the House, I will place a copy of the report in the House Library.