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

edited 30 November -1 at 1:00AM in Pensions, Annuities & Retirement Planning
49 replies 5.6K views
"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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  • kidmugsykidmugsy Forumite
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    "given"? New headline required.
    Free the dunston one next time too.
  • SailorSamSailorSam Forumite
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    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.
    Liverpool is one of the wonders of Britain,
    What it may grow to in time, I know not what.

    Daniel Defoe: 1725.
  • greenglidegreenglide Forumite
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    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.
  • SailorSamSailorSam Forumite
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    As i said i hadn't read it.
    Never did like that man.
    Liverpool is one of the wonders of Britain,
    What it may grow to in time, I know not what.

    Daniel Defoe: 1725.
  • edited 3 April 2014 at 11:32AM
    OblivionOblivion Forumite
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    edited 3 April 2014 at 11:32AM
    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. :(
    ... Dave
    Happily retired and enjoying my 14th year of leisure
    I am cleverly disguised as a responsible adult.
    Bring me sunshine in your smile
  • ReaperReaper Forumite
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    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.
  • OblivionOblivion Forumite
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    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.
    ... Dave
    Happily retired and enjoying my 14th year of leisure
    I am cleverly disguised as a responsible adult.
    Bring me sunshine in your smile
  • greenglidegreenglide Forumite
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    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.
  • atushatush Forumite
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    Unless you live in Warwickshire or some other counties where men now outlive women?
  • AquamaniaAquamania Forumite
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    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)
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