A new warning has been issued over an easy-to-make pension mistake that could see Brits lose out on nearly £4000 a year.

Deferring a pension is a popular way to boost savings for retirement. For every year a person delays, they boost their pension pot by just under 5.8%.

However, for some, this could be a huge mistake as it may put them over the threshold for Pension Credit, a useful benefit worth up to £3900 a year.

Brits warned over huge pension mistake that could see them lose out on £3900 a year

According to The Sun newspaper, many of those who made the move say they regret the decision.

Many of them warned that deferring had made them worse off.

Now, those who are in a position to consider deferring their pensions are being told to think very carefully about it.

People who receive the full state pension (£221.20 a week) are already over the threshold for Pension Credit.

Individuals who get less than the full pension amount will be negatively affected if they choose to defer due to their number of qualifying National Insurance years.

Under the current rules, you need at least 35 qualifying years to get the full state pension amount.

For example, someone who has 34 of the qualifying years would get 34/35 of a full pension (around £214.88).

If this person takes their pension on time, they would be entitled to Pension Credit as well as the benefits that come with it.

However, if they defer by just a single year, the extra 5.8% would put them over the threshold.

Former pensions minister Steve Webb said those close to retirement should "think very carefully" before deferring.

Mr Webb added that people working after pension age who are thinking of deferring for tax reasons could still end up worse off.

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He continued: "Not everyone takes their state pension as soon as they reach pension age, and the reward for deferring is an extra 5.8% on your pension for each year you defer.

"But for people whose pension is short of the full amount, there can be a sting in the tail.

"If your normal pension figure is below pension credit then claiming at retirement means you will get a top-up and all the extras which come with pension credit such as keeping your winter fuel payment.

"But if you defer even for one year, you might find your pension is now over the pension credit line and that you have lost all of that additional help - potentially for the rest of your retirement."