Working longer could result in £32,000 pension boost

04 February 2005
New Government plans mean people who continue to work five years past retirement age could be offered a lump sum of £32,306.

Pensions Minister Malcolm Wicks said: "We are working towards ending the shame of perfectly capable workers being in work one day and then effectively out the next just because of their age.

"It is not about forcing people to work longer, far from it. Instead we want the workplace and the state to be flexible."

If it comes to pass the plan would see those who work until they are 70 receiving a £32,300 tax-free lump sum. A ten-year delay would generate a £77,090 payment.

Secretary of State for Work and Pensions, Alan Johnson, added: "All the research shows that people want the choice about how and when they retire. Already over one million people have chosen to carry on working in some form past pension age and I want to encourage people who still have something to offer in the workplace to keep on working.

"The chance to defer offers our older workers a real choice about what they want to do when they get to State Pension Age. A typical person who defers for five years could be looking at getting a taxable lump sum of anything between £20,000 and £30,000."

People who do not want a lump sum can have the money added to their weekly pension contribution.

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