State 'top-up' scheme permits pensioners to increase retirement savings
Whilst there are over seven million Britons who will be able to boost their state pension through a new ‘top-up’ scheme the Government has launched, the Department for Work and Pensions (DWP) admits that the scheme will not be suitable for all pensioners, with around 265,000 expected to take up the offer.
The new measure, known as Class 3A national insurance contributions, is a part of the transition to the new flat rate state pension, which is set to be introduced by the DWP in April 2016.
The flat rate pension is expected to be worth more than £150 a week and will rise with inflation.
The opportunity to pay class 3 contributions will be available from 12 October 2015 to 5 April 2017. There are two entitlement conditions: contributors must have entitlement to a UK State Pension, and they must reach State Pension age before 6 April 2016.
The Government has created a State Pension calculator to help determine how much is needed to top-up a State Pension – see https://www.gov.uk/state-pension-topup