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State 'top-up' scheme permits pensioners to increase retirement savings

12 Oct 2015

Over seven million Britons could potentially boost their state pension through a new 'top-up' scheme.

Men aged over 65 and women over the age of 63 are eligible to receive an additional £25 a week on their state pension, which can be achieved by paying a one-off lump sum.

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 Department for Work and Pensions (DWP) in April 2016.

The flat rate pension is expected to be worth more than £150 a week and will rise with inflation.

However, the DWP admits that the new Class 3 ‘top-up’ initiative will not be suitable for all pensioners, with around 265,000 expected to take up the offer.

Pensions minister Baroness Altmann stated: ‘It won’t be right for everybody and it’s important to seek guidance or advice to check if it’s the right option for you.

‘But it could be particularly attractive for those who haven’t had the chance to build significant amounts of state pension, particularly many women and people who have been self-employed.’

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