New State Pension Top Up Plan Announced

09/02/2015

Pensions Minister Steve Webb has announced plans to allow pensioners to be able to top up their State Pension by up to £25 a week, even if they have already retired.

Pensioners and those reaching State Pension age before 6th April 2016 can top up their benefits, through a new Class 3A Voluntary National Insurance Contribution.

Those eligible to make the contributions will be able to do so for 18 months from October 2015 onwards. There will be a cooling-off period of 90 days.

For a 65-year-old to get an extra £1 a week, they will need to pay £860 in voluntary contributions and the rates are the same for men and women. The maximum top up for a 65 year old is £22,250, which would provide them with an extra annual gross income of £1,300 for life.

The contribution decreases with age, so for a 70 year old the rate per extra £1 a week reduces to £779, and by age 75 it is down to £674.

It’s worth noting that your State Pension will actually increase each year, in line with the Consumer Prices Index measurement of inflation, for the rest of your life.

If you would like more information on the above or any advice on your personal financial circumstances, please contact us >>

Written by Clive Shaw | Chief Executive

Clive joined Mantle Financial Planning in 1991 & became Chief Executive in 2007 Read more >>

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