As of the 12th October, the new state pension ‘top up’ scheme will be implemented by the government giving over 7 million Britons the option to top up their state pensions by as much as £1,300 more per year.
Anyone who reaches pension age before April 6th 2016 and existing pensioners will be eligible for a guaranteed income of up to £25 a week, in exchange for a one-off payment.
It is predicted that around 265,000 people will use this scheme introduced by the government, including those in self-employment who will also benefit from this scheme. The self-employed could treble their income compared to pursuing a savings bond. If you paid £10,000 into this scheme, you’ll get an extra £572 a year before tax although, if you put the same amount of money in the average savings bond at 1.8 per cent, you would only receive a pay out of only £180 per year before tax.
Additional payments made by a pensioner will be guaranteed and accessible for life and can also be inherited by surviving partners who have half or more of the additional pension, but only after they reach state pension age.
However, an individual who will reach state pension age after April 6th and believe they have missed out will be able to boost their pay out with the new higher flat rate pension. Women born before April 6th 1953 and men before April 6th 1951 will be able to benefit from this scheme which will run for 18 months.
According to a spokesperson from DWP, information packs will be sent out to individuals who have signed up for the top up scheme. Although, due to many different contributing factors, we advise that you speak to an accountant regarding your pension.
Here at Gorilla Accounting, we provide unlimited support under our client service guarantee in our all-inclusive accountancy package that’s priced at only £85 + VAT per month. Our contractor specialist accountants will provide assistance to any queries you may have. To learn more, get in touch on 0330 024 0406.