Due to the recent change in State Pension, the government introduced a State Pension Top Up Scheme which allows purchase of additional pension between £1 and £25 per week via a lump sum payment. The Scheme only runs up until 5 April 2017.
You are eligible to purchase the Top Up if you were entitled to a State pension before 6 April 2016 –
Men born before 6 April 1951
Women born before 6 April 1953
There is an online calculator which will tell you how much it will cost depending on your age and the amount of pension you want to Top Up. The cost falls as your age decreases. Look up www.gov.uk/state-pension-topup.
The advantages of the Top Up are:-
• Guaranteed for life
• Protected against inflation ( the State Pension is linked to the Consumer Price Index)
• Inheritable by spouses or civil partners (between 50% and 100%)
The disadvantages may be:-
• It is additional taxable income
• It may affect income related benefits
There are other ways to boost your State Pension – Defer, Pay Voluntary Contributions etc.
Always take independent Financial Advice before making such a big decision.
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