Changes to the State Pension introduced in 2005 mean you now have the choice of two different ways to defer your State Pension.
One way is to receive something called an Extra State Pension on top of your State Pension when you finally do draw it and the other option is to be paid a one-off taxable lump sum for doing without your pension for a while.
Anyone opting for the extra pension can get an increase to their State Pension of 1% for every five weeks that they defer taking it. That is approximately a 10.4% increase for every full year of deferment.
People going down the taxable lump-sum route will need to agree to defer for at least one year and will build up a lump-sum equivalent to the total of the deferred payments plus interest added weekly and compounded. The interest rate used being 2% above the Bank of England base rate.