Increase your pension up to £25 a week: Steve Webb

uk1

The scheme is open to anyone who has already reached pension age, or will do so by April 2016 (when the flat rate pension kicks in). It was first announced in the Autumn Statement, when George Osborne said that the scheme was likely to kick off in October 2015. However, at that point there were scant details of how it would work.

Haven't seen any discussin of this yet ..... and looks from the scant detail that it may be attractive to those with some savings that qualify.

If they also make this a part of the base pension then it would be particularly attractive to those that have deferred. My wife has deferred for 4 years and presumably her £25 per week woud have an instant increas of around 44% which would then enjoy the normal anual increase.

2014

Could some one do a table for a novice like me to understand
How some one who is considering paying into this new scheme.
Thanks in advance !!

zygurat789

2014 wrote: »

Could some one do a table for a novice like me to understand
How some one who is considering paying into this new scheme.
Thanks in advance !!

AIUI the basic pension will be increased to £140pw, however, all those current pensioners will NOT have their pensions increased. So this generous government will allow them to buy the extra pensionbecause all the people around them (civil servants MPs etc) who are retiring seem to have pots of money.

Linton

Its known as Class 3A NI contributions and was announced in the Budget Statement at the start of December. For more information, and as a antidote for press misinformation, read here.

jamesd

From the details it appears unlikely to be a good deal for most people.

1. It's to be actuarially neutral but ignores gender. This means that on average men will lose out and women gain because women live longer than men on average.
2. It will be inheritable by a spouse, so single people will lose out, while married people will gain at their expense.

So initial filtering suggest that from the design of the scheme single males will be most disadvantaged by using it and married females most advantaged.

The interest rate used to calculate whether it's actuarially neutral isn't given. If it's gilts it'll be a poor deal just because those offer poor income levels.

uk1

So is the intention to make it a part of base pension ie so that if taken will be subject to deferral increases? If so .. that would be decent.

Thanks.

greenglide

uk1 wrote: »

So is the intention to make it a part of base pension ie so that if taken will be subject to deferral increases? If so .. that would be decent.

Thanks.

It will increase the AP payable for people who are in receipt of SP, will reach SPA before the start of STP, people who have already deferred or will defer payment of SP before the start of STP.

Only people who have reached SPA before the start of STP (born before April 2007 on current plans). Anyone born after April 2017 cannot pay Class 3a.

uk1

Thanks ... but I didn't understand.

My wife could have retired 4 years ago but hasn't. If we add this to her yet unpaid pension will it be increased by both the deferral bonuses and annual increases.

Jaycee_Dove

There is a discussion started yesterday of this topic in this sub forum called (not totally helpfully) Top Up - is this good or bad value? Might add a few things not covered here so far.