Millions of older savers have been given the opportunity to boost their retirement income by topping up their state pension.
The scheme, known as Class 3A, enables voluntary top ups of up to £25 per week (£1,300 per year) for those already in receipt of a state pension or due to receive one before 6 April 2016. For men, this means those born before 6 April 1951 and women before 6 April 1953.
The reform is a way to compensate individuals who won’t be eligible for the new, more generous, flat-rate state pension, which comes into effect in April 2016.
The top up will be paid in addition to the current state pension, which currently sits at £115 a week.
The amount paid is based on the person’s age and takes into account average life expectancy in the UK. For example, a 65-year-old man who would like an extra £10 a week pension income would need to pay £8,900, whereas a 75-year-old would require £6,740.
The scheme will remain open for the next 18 months, meaning pensioners have until 5 April 2017 to make their contributions and maximise the opportunity.
Topping up your pension, however, isn’t the only way to boost your retirement income, as this scheme may not be suitable for everyone.
To discover the best method to maximise your retirement fund, contact our pension experts on 0161 703 2500.