State Pension Top Up – Class 3A NIC

There is the potential to boost your State Pension by up to £25pw (£1,300 pa) by making a special Class 3A NI contribution, if you are a man born before 6 April 1951 or a woman born before 6 April 1953.The DWP has provided a calculator to indicate the cost of topping up your State Pension: https://www.gov.uk/voluntary-national-insurance-contributions/top-up-your-state-pension

Currently, the State Pension benefits from a valuable ‘triple lock’ indexation of the lower of average earnings, CPI or 2.5% pa. This should continue until 2020, after which time the indexation may be altered.

The pension can be inherited by a spouse subject to a taper over time, but in your case this is currently irrelevant.

The indicative cost is generally significantly lower than a private annuity would cost with similar indexation. However, as with annuities the relative value for money depends on your health/longevity, as well as tax position, since the State Pension is paid gross but taxable.

 There is a deadline for applying to the DWP of 5 April 2017.

Please note, this article is for information only and does not constitute investment or tax advice. Past performance is not necessarily an indication of future returns; the value of investments and any income from them is not guaranteed and can fall as well as rise; pension rules and tax legislation are subject to change. If you would like investment or pension advice on your individual circumstances, please do not hesitate to get in touch on 01392 875500 or info@SeabrookClark.co.uk

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