A State Pension lump sum is possible only if you deferred your pension, and only in some cases. What you can get depends on when you reached State Pension age.

Pension Wise, the free, impartial, government-backed service from MoneyHelper, explains options for defined contribution pots rather than the State Pension, so for a deferral question the Pension Service (or, for the basic State Pension, the State Pension claim line) is where to start. If the choice also touches your other pensions, tax or benefits, you can ask to speak to an FCA-authorised adviser, and a quick enquiry through this page's form brings a free call-back.

Can you take your State Pension as a lump sum?

It depends on your State Pension age. GOV.UK says that a State Pension you do not claim at State Pension age defers by itself, with nothing for you to do. (GOV.UK, Defer (delay) your State Pension, updated 8 November 2024, read 21 October 2026.) Two groups follow:

  • Reached State Pension age on or after 6 April 2016 (a man born on or after 6 April 1951, or a woman born on or after 6 April 1953): the new State Pension. When you claim after deferring, you can backdate the claim and take up to 52 weeks of missed pension as a one-off arrears payment, take higher weekly payments, or both. That is back pay rather than a lump sum in the older sense, as the next sections show.
  • Reached State Pension age before 6 April 2016 (a man born before 6 April 1951, or a woman born before 6 April 1953): the basic State Pension. Deferring for at least 12 months can give a true lump sum, in place of higher weekly payments.

Deferral is a decision about timing and income, not a way of cashing in. Whether to defer at all is covered in is deferring your State Pension worth it?, and the mechanics of the two systems in new State Pension vs old.

State pension lump sum if you reached State Pension age before 6 April 2016

Basic State Pension claimants who defer can choose a lump sum, but only after putting off the claim for 12 months or more, according to GOV.UK. The choice is made once you claim: a letter asks how you want your deferred pension, and you have 3 months from the date on it to decide.

The alternative is extra weekly State Pension for life, and you pick one or the other; the only exception is for people who reached State Pension age and deferred before 2005, who can have both. The lump sum also pays interest for the wait, set at 2 percentage points above the Bank of England base rate.

Two points to weigh before choosing. First, benefits: GOV.UK says "Your Universal Credit payments may be reduced if you choose to take your extra State Pension as a lump sum", while higher regular payments could instead reduce other means-tested help, so each route has a cost for some households. For how a lump sum would sit beside Pension Credit or Universal Credit in your own household, the enquiry form here can set up a free chat with an adviser.

State pension one-off payment if you reached State Pension age on or after 6 April 2016

On the new State Pension, the one-off payment GOV.UK describes is back pay rather than a deferral lump sum: when you finally claim, you can backdate the claim and receive the weeks you missed as a one-off arrears payment, capped at 52 weeks (12 months). GOV.UK puts it this way in its own example: "If you defer your full new State Pension for 78 weeks (18 months), you can backdate your claim by 12 months and get a one-off arrears payment of £12,547.60."

That £12,547.60 is GOV.UK's figure for 52 weeks of the full new State Pension; for 27 weeks its example is £6,515.10. Both are illustrations for someone on the full rate, not amounts anyone is owed, and your own arrears follow your own weekly entitlement. Two things set the payment apart from the old lump sum. No interest is added to it. And the weeks you take as arrears are paid out rather than turned into a bigger weekly pension: deferral beyond 52 weeks becomes extra State Pension, so in the 78-week example only the other 26 weeks add to the weekly amount, an extra £6.97 a week (2.89% of £241.30). You can combine the two, and increased weekly payments need "at least 9 weeks" of deferral first.

How much extra weekly pension a year of deferral buys, and how long it takes to break even, belongs to deferring your State Pension.

Is a deferred State Pension lump sum taxed?

Yes, the basic State Pension lump sum is taxable. HMRC's Employment Income Manual describes it as the option for people who reached State Pension age before 6 April 2016 and deferred for 12 months or more, and says "The State Pension lump sum payment is chargeable to Income Tax". The law says so in terms: "A charge to income tax arises where a person becomes entitled to a social security pension lump sum." (Finance (No. 2) Act 2005, section 7 on legislation.gov.uk.) Taxable is not the same as taxed, though: HMRC's manual adds that if your net income without the lump sum is below the personal allowance for the year, no tax should be deducted from it. New State Pension arrears are not this lump sum, since HMRC ties it to State Pension age before 6 April 2016; GOV.UK's deferral guide says that extra payments from deferring could be taxed, and is the State Pension taxable? covers tax on the weekly pension.

The charge works differently from ordinary income. The same section treats the lump sum as income but it "is not to be taken into account in determining the total income of any person". The manual spells out what follows: it "will not be aggregated with the individual's other income and consequently it cannot push the individual into a higher tax band." Instead it "is taxed at the highest rate of tax that applies on the individual's total income", which is your highest rate on the rest of your income that year. Section 7 also has separate rules for a Scottish taxpayer and a Welsh taxpayer, so where you live in the UK can change the rate.

On collection, DWP asks you when you claim for your expected highest rate. If you do not say, "tax at the basic rate will automatically be withheld by DWP", so what is withheld may differ from what you owe either way. HMRC's manual adds that you can elect to take the lump sum in the tax year after the one in which your weekly pension starts, which changes the year it is taxed in. Which year suits depends on your other income in each; leave your number on this page and an adviser can compare them with you.

Can you inherit a deferred State Pension as a lump sum?

A widowed spouse or civil partner can sometimes inherit a lump sum. GOV.UK says you can usually inherit a partner's extra State Pension if all of these apply:

  • your partner reached State Pension age before 6 April 2016;
  • you were married to, or in a civil partnership with, your partner when they died;
  • your partner had deferred their State Pension or was claiming their deferred State Pension when they died; and
  • you did not remarry or form a new civil partnership before you reached State Pension age.

The lump sum choice applies where your partner died before claiming their State Pension: "If your partner deferred their State Pension by a year or more, you can usually choose to inherit it as a lump sum or as regular payments", and a letter sets out the options. For a deferral of between 5 weeks and a year, "you’ll inherit it as regular payments." If your partner had already started getting their extra State Pension, you inherit it as extra regular payments alongside your own State Pension, not as a lump sum. Inherited extra pension is paid only once you have reached State Pension age yourself, GOV.UK adds conditions where the partner died before 6 April 2010, and whether a particular death and marriage history qualifies is for the Pension Service to decide. Wider questions about what a partner's pensions pay on death are in how pension death benefits work.

How does this compare with the tax-free lump sum from a private pension?

The two are different things. A private pension can usually pay part of the pot as cash without income tax, up to a quarter of the amount built up (25%), according to GOV.UK. The State Pension has no such cash entitlement; its lump sum is a taxed payment for deferral and exists only on the basic State Pension. The private-pension rules, limits and ways of taking the cash are in how to take your pension tax-free lump sum and the tax-free lump sum explained.

If you hold invested pension savings alongside a State Pension, remember that their value can fall as well as rise, and you may get back less than was paid in. The State Pension is not invested in that way.

State pension lump sum questions people ask

Can I claim my State Pension in a lump sum?

Only by deferring it first. People who reached State Pension age before 6 April 2016 can choose a lump sum after deferring for at least 12 months; people reaching it on or after that date can backdate their claim for a one-off arrears payment of up to 52 weeks.

Is there a State Pension lump sum for people who are not yet at State Pension age?

The lump sums on this page arise from deferring a State Pension, and GOV.UK describes deferral as what happens when you do not claim at State Pension age. Your own date is on the State Pension age page.

What is the 12.5k State Pension payment?

It is most likely GOV.UK's worked example of £12,547.60: 52 weeks of the full new State Pension paid as arrears when a deferred claim is backdated by 12 months. It is an example, not a payment anyone is automatically owed.

Is a deferred State Pension lump sum tax free?

No. HMRC treats the basic State Pension lump sum as chargeable to Income Tax, at your highest rate that year and separate from your other income, though no tax should be deducted if your other income is below the personal allowance. Details are in the tax section above.

How is a deferred State Pension lump sum calculated?

On the basic State Pension the amount includes interest of 2% above the Bank of England base rate; on the new State Pension the arrears payment has no interest. Ask the Pension Service for the exact figure for your claim; to talk through what it means for your wider plans, request a call-back and an adviser will explain, free.

Is a deferred State Pension backdated?

For the new State Pension, yes, up to a point: GOV.UK lets you backdate the claim by up to 12 months and take those weeks as a one-off arrears payment, with no interest, while any deferral beyond that becomes extra weekly pension. For arrears of other kinds, see State Pension back payments.

How do I claim a deferred State Pension lump sum?

You claim your State Pension as normal; on the basic State Pension a letter then asks how you want the deferred amount, and you have 3 months from the letter date to decide. GOV.UK lists the State Pension claim line for help.

Your next step

Start with the government's own routes: the Pension Service or State Pension claim line for your deferral options, and Pension Wise for any defined contribution pots. For your State Pension, workplace and personal pensions, tax and benefits looked at as one picture, the form here is the quick route: an FCA-authorised adviser calls at a time you choose, and the call costs nothing. For the bigger picture, see the State Pension guide and how pension drawdown works.