MSE News: Pensioners to be given £25 a week state pension boost

Former_MSE_Helen

"Pensioners will be able to buy top-ups of as much as £25 in extra state pension per week from autumn next year"

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Pensioners to be given £25 a week state pension boost



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kidmugsy

"given"? New headline required.

SailorSam

I've not read the article yet but i'm 61 later this month, an extra £25 a week, thank you.
I've always said what a nice man that Mr cameron is. I think him and Mr Osbourne and IDS are all very nice men.

greenglide

SailorSam wrote: »

I've not read the article yet but i'm 61 later this month, an extra £25 a week, thank you.
I've always said what a nice man that Mr cameron is. I think him and Mr Osbourne and IDS are all very nice men.

So do you reach SPA by 5/4/2016? This only applies to people who get the "old style" pensions before STP comes in.

You will need to be female to achieve this.

SailorSam

As i said i hadn't read it.
Never did like that man.

Oblivion

So a 65 year old man would have to pay the government £890 to buy an extra £1 a week pension (really 80p after tax). So you'd have to live another 21 years to recoup your outlay, and that doesn't even factor in the opportunity cost. £890 invested at 2% for 21 years would have earned you £460 with compound interest so it's really costing you nearer £1,350 for each extra £1 a week purchased.


Doesn't sound like much of a deal to me.

Reaper

Oblivion wrote: »

So a 65 year old man would have to pay the government £890 to buy an extra £1 a week pension. So you'd have to live another 17 years to recoup your outlay, and that doesn't even factor in the opportunity cost. £890 invested at 2% for 17 years would have earned you well over £300 so it's really costing you nearer £1,200 for each extra £1 a week purchased.

Doesn't sound like much of a deal to me.

It sounds reasonable to me. Even for a 65 year old (who gets the worst deal) you are effectively getting 5.84% interest for life (and beyond as half of it will transfer to your spouse). Best of all it rises with inflation.

Oblivion

Just reworked my #6 as I'd overlooked the fact that it's really only 80p a week you're buying once the government have taxed it.

greenglide

But it is a better deal for women than men because of the longer life expectancy.

Also better deal for married couples than single especially if the older spouse buys the extra.

atush

Unless you live in Warwickshire or some other counties where men now outlive women?

Aquamania

Oblivion wrote: »

So a 65 year old man would have to pay the government £890 to buy an extra £1 a week pension (really 80p after tax). So you'd have to live another 21 years to recoup your outlay, and that doesn't even factor in the opportunity cost. £890 invested at 2% for 21 years would have earned you £460 with compound interest so it's really costing you nearer £1,350 for each extra £1 a week purchased.


Doesn't sound like much of a deal to me.

I agree it doesn't sound a wise investment for most (unless perhaps you plan to live past 100)

But I'm not sure your figures are quite right, or should I say applied correctly.
Interest earned will probably be subject to tax and of course the £890 will not be invested in full for 21 years because it's effectively subject to weekly (probably 4 weekly in reality) draw down.

Though I think I would rather have the cash under my control than hand it to the government only for them to let me have a little every week ... and keep the rest if I die early (although they will need some of it for the odd few that do take up the offer and do live to about 100)