Good deal from pension top-up

The government is about to offer an attractive deal to top up their state pension, says the Mail.

From October, those who have reached retirement age before April 2016 can buy extra state pension on attractive terms by paying lump sum ‘3a’ National Insurance contributions. A 65 year old could get £572 a year from a £10,000 investment, more than three times what they would currently be getting in interest on a typical savings account. Like the state pension, the income will be index-linked, and half the income will be paid to a widow or widower. The deal will be especially attractive to women and the self-employed who have not accumulated rights to a full state pension.

Some people will benefit hugely from this scheme, but for those without a partner who will inherit their pension, or who are in poor health, the deal may not be worthwhile.