Retirees offered chance to top up state pension - Pensions - News |

News News brings you the latest financial & economic news & reviews of the best products in the UK by our team of money experts.

Retirees offered chance to top up state pension

Retirees offered chance to top up state pension

Category: Pensions

Updated: 30/12/2013
First Published: 30/12/2013

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

People in or nearing retirement are to be given the chance to top up their state pension potentially to the tune of hundreds of pounds a year.

In the Autumn Statement, George Osborne revealed plans for a scheme which would allow existing pensioners and those retiring before April 2016, a group who would miss out on the more generous single tier state pension which is to be introduced at this point, to enhance the pension they receive from the state.

At present, state pension benefits are split into two main elements. Thirty years of National Insurance contributions or credits are needed to qualify for the full basic state pension of £110.15 a week.

However, in addition to this it is possible to build up an entitlement to another element, an earnings-related pension currently known as the state second pension, which could total as much as £163 a week.

Under the new scheme, from October 2015, eligible pensioners will be able to pay a new class of voluntary National Insurance contribution which will boost the amount of state second pension they are entitled to receive.

According to pensions minister Steve Webb, pensioners are likely to be able to buy up to £25 a week in additional pension.

Although full details of the scheme are yet to be confirmed, it is known that there will only be a limited window of time in which contributions can be made.

The Government says the scheme will prove particularly helpful to the self-employed and women who may have gaps in their National Insurance record from taking time off work to raise a family

What Next?

Increase your income in retirement by up to 40% - Use our online annuity planner to compare plans from a wide range of providers

For more information on your pension plans and what to do when retiring check out our retirement guides section

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.