The flat-rate state pension will rise by 2.7% from April 2014. The individual pension will rise by £2.95 to £113.10 per week.
The government plans to offer retired people the chance to make extra National Insurance contributions to purchase top-ups to their state pensions. The new Class 3A NI contributions will be available between October 2015 and April 2016 and will allow people to buy between £1 and £25 per week extra pension for life. The return on the contributions is expected to be significantly better than that available with annuities.