The Option To Delay Your State Pension Age
Our State Pension is available from age 66, and while discussed in the past, there are no plans to change this. From 2024 though, individuals can choose to defer the payment of their State Pension all the way out to age 70. In doing so, you will receive a higher initial pension. Based on full benefit entitlement using today’s figures, the following is available to you:
- Age 66 – €277.30 per week
- Age 67 – €290.30
- Age 68 – €304.80
- Age 69 – €320.30
- Age 70 – €337.20
There are a number of reasons why someone might consider postponement:
- For an entitlement to the State Pension, you must have accumulated at least 520 PRSI credits, i.e. have been working and/or in receipt of Stamps for at least 10 years. For anyone short of that number by age 66, you can now choose to postpone your entitlement beyond age 66 to allow you increase your of Stamps;
- In another example, while you may have a full entitlement to State Pension at 66, you may choose to continue working for a few more years, to further increase your benefit once available;
- There is also the scenario where a higher tax payer may anticipate a fall in income in the coming years, making it more tax efficient to postpone receipt of State Pension until then.
No doubt there are other scenarios, but for anyone thinking of postponing, it is important to also consider the potential payback period. By way of example, if you were to postpone receipt of the State Pension to 68, your weekly benefit will increase from €277.30 to €304.80 per week. However, in doing so there is the lose of two years State Pension or €28,839 for the years between ages 66 and 68. Although you will receive an extra €27.50 per week, the payback period in this example is approximately 20 years, i.e. all the way out to age 88.
We expect the option to postpone the State Pension will suit only a very small number of people. In every scenario it will be important to check the figures before making a final decision.