Pensioners will be able to make voluntary national insurance contributions to ensure they are entitled to full state payouts under plans put forward by the Government.
In last week’s Autumn Statement, the Government outlined plans to allow current pensioners, and those who reach pension age before the new single tier pension is introduced in April 2016, an option to top up their additional state pension through a new class of voluntary NI.
The scheme will be introduced in October 2015 and will be time limited. The details of the scheme will be set out closer to the time of implementation, with the price of the new class of NI being set at a broadly actuarially fair rate.
The Government says it will legislate for this scheme at the earliest available opportunity
People can already make extra NI contributions before they retire but this scheme is separate and can help existing retirees.
Chancellor George Osborne said the scheme is aimed at women and the self-employed who have not built up enough NI contributions.
National Association of Pension Funds head of policy Helen Forrest says: ”This provides an opportunity for all those people who, for whatever reason, have been unable to build up their qualifying years of National Insurance Contributions to ensure they will be eligible to receive the full single tier state pension.”