the age allowance starts to be reduced, you will keep the higher allowance notwithstanding. Pension Credit Pension Credit has rules about notional income, or income that you are treated as having although you do not actually possess it. Even if you defer your state pension, the amount of the state pension which you would be entitled to claim will be treated as notional income in your pension credit calculation, and will therefore be counted in full. Example: Mr Jones reaches 65 on August 1st 2005. He would be entitled to claim a state pension of 82.15 per week. Mr Jones decides to defer his pension for a few years as he has an occupational pension of 150 per week which he is happy to continue living on. When he applies for pension credit his total income will be calculated as 232.15 per week even though he only physically receives 150 of this. This is because his deferred State Pension is counted as notional income - income which he is entitled to but has chosen not to claim. When you do finally decide to claim your state pension it will be taken into account in full (along with any extra state pension which you have accrued) when calculating your entitlement to pension credit. We are informed by the DWP that it is the Government's intention that the lump sum payment is to be ignored in the calculation of Pension Credit, and that they will be bringing forward legislation that will come