Under six months remaining to apply for State Pension Top-Up
The Department of Work and Pensions have issued a reminder for those who are interested in topping up their state pensions by up to £25 per week via 3A Voluntary National Insurance Contributions that they have until 5th April 2017 to do so. It is available to all pensioners who have reached the State Pension Age before the introduction of the New State Pension on 6th April 2016.
When the government first introduced the additional State Pension on 12th October 2015 it was stated that the rate offered would be in line with the current market rates. However annuity rates have been in decline since this announcement (partly due to Brexit), while the rate offered by the additional State Pension has remained constant, which thus makes the option of obtaining the additional State Pension particularly appealing.
For a 66 year old to obtain an index linked pension income of £1300 per annum in retirement via an annuity with a 50% Spouse’s pension, £46,900 must be invested (as at 28th October according the Money Advice Service website). However in order to obtain the same amount of income and benefits, an individual must contribute £21,775 in class 3A National Insurance Contributions on the same date (based on DWP calculator). This reveals that making class 3A National Insurance Contributions is a significantly less costly way of topping up your income in retirement than purchasing an annuity, and can considerably improve your lifestyle.
In order to apply to make Class 3A Voluntary National Insurance Contributions and to obtain further information about the scheme, please visit the official Government website –