17,000 eye state pension top-up

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Nearly 17,000 people are planning to top up their additional state pension when a voluntary contribution scheme opens next month.

Figures from the Department for Work and Pensions show 16,870 registrations of interest have been received for making Class 3A voluntary National Insurance contributions.

In April 2014 the Government announced people reaching state pension age before the introduction of the new single-tier state pension would be able to purchase addition benefits.

The scheme will be open from 12 October 2015 until 5 April 2017.

It will allow pensioners to purchase up to £25 a week in additional state pension, uprated by the Consumer Prices Index, in exchange for a lump sum.

The new rules mean someone aged 65 will get an extra £1 of state pension a week for every £890 they give to the Government.

The rate improves the older you are, so 70-year-olds will pay £779 to get £1 back while 75-year-olds will pay £674 for every extra £1.

There is a 90-day cooling-off period during which savers can change their mind about buying extra state pension benefits.

According to Government figures around two-thirds of people hitting state pension age in 2016 will not get the full single-tier payment.

The level of the state pension has not yet been set.