Pensioners will be able to buy top-ups of as much as £25 a week in extra state pension from autumn 2015 under government plans.
The scheme will be available from October 2015 to all those who have reached state pension age by April 2016, including existing pensioners, and the cost of the top-up will be based on the person’s age and average life expectancy.
The plans mean that for example, for a 65-year-old, buying an extra £1 of pension each week will cost £890, but for a 75-year-old the contribution rate for the same amount of pension would be £674.
The state pension top-up will allow people to boost their pension by paying a new class of voluntary national insurance contributions called “class 3A”.
Pensions minister Steve Webb said: “This is another bold action in how we build a stronger economy through choice in retirement income. The scheme will give them a guaranteed, index-linked return and will be particularly attractive for women pensioners who will draw the higher pension for longer. It will also help the self-employed, who currently qualify for only the basic state pension.”
The top-ups can be inherited, with a surviving spouse or civil partner entitled to at least 50% of the additional state pension.
People will be able to pre-register their interest in the offer, which is open for 18 months.
The government estimates that around 265,000 people may take up the offer, based on research carried out earlier this year to gauge possible interest in the scheme.
More information about the new top-up scheme can be found at the government website, where a personal calculator has been set up for people to work out the contribution needed to increase their pension by a weekly amount.
You can register your interest by calling 0845 600 4270 or 0345 600 4270.
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