Mr Webb said the new rate would be a 1/9th of 1 per cent for each weeks the state pension is not claimed, or 1 per cent for every nine weeks, which amounts to an 5.8 per cent rise per year.
Previously the state pension increased by 1 per cent for every five weeks’ delay in claiming, or 10.4 per cent for every full year.
Mr Webb said the decision followed the publication of a report by the Government Actuary.
In a one-page written statement to Parliament, Mr Webb said the report had set out to look what would be a fair rise in the deferral rate.
He said: “Earlier this year the Department commissioned the Government Actuary to provide a Report on the actuarially fair rate of increments for those reaching State Pension age on or after 6 April 2016 and choosing to defer their State Pension beyond State Pension age.
“It is my intention to bring forward draft regulations later this year, under the powers in the Pension Act 2014, which will set out the proposed rate.”
