A quarter (25%) of retirees aged between 55 and 64 are unaware of the option to defer their state pension, Just Group has found.

A survey of 1,050 retired and semi-retired people by the retirement specialist firm revealed that more than a fifth (22%) of retirees did not know they have the option to defer the date they start to receive the state pension.

The research found that women (26%) were more likely than men (19%) not to know about the possibility of deferring their retirement income, while 26% of those aged 75 and over also did not know that deferral was an option.

Furthermore, just 7% of those surveyed who are aged 55 and over said they had used state pension deferral themselves.

Someone reaching the state pension age, which currently stands at 66 years old, can either claim state pension or defer. Even if someone is receiving state pension, they can still choose to defer but can only do this once.

Group communications director at Just Group, Stephen Lowe, said: "Deferring can be good option for people who don’t need the income immediately – perhaps because they are still working or have other sources of cash – so it is disappointing a quarter of those approaching state pension age don’t know about the option.

"While deferring might not be the right option for everyone, it should still be something everyone knows about given that the state pension is widely considered a ‘bread and butter’ source of income in retirement, with 3.4 million retired households relying on it for more than half of their yearly income."

How much people can gain by deferring depends on whether they reached state pension age before or after 6 April 2016.

Those who reach state pension age on or after 6 April 2016 can benefit from a 1% increase in their weekly state pension for every nine weeks that the payments are deferred, equating to 5.8% in extra income for every full year deferred.

With the triple lock boosting the annual state pension to £221.20 a week from April 2024 for this younger cohort of state pensioners those who defer their payments for the 2024/25 financial year will benefit from an extra £12.78 a week.

This equates to £664.58 of additional payments across an entire year.

For those who reached state pension age before 6 April 2016 and defer, they receive an extra 1% state pension income every five weeks deferred, equating to an annual rise of 10.4% or £916.66, which can be taken either as extra income or a lump sum.

Lowe added: "Deferring has become less attractive in recent years because the terms have become less generous for those who reached state pension age on or after 6 April 2016 and there is no option to take the deferred income as a lump sum.

"However, even for those who reached state pension age after that date, in some circumstances it can still make sense to forego some income in the short-term for a higher income in later life that is currently guaranteed to keep up with inflation."

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