The Government will confirm details of a scheme to allow existing pensioners to boost their state pension entitlement by up to £25 a week in the coming weeks, the Daily Mail reports.
Under the plan, which was outlined as part of the Autumn Statement in December, anyone who has reached state pension age or will do so by April 2016 will be able to pay between £900 and £25,000 to top up their pension.
The Mail says the Government will increase peoples’ weekly state pension by around £1 for every £900 paid in. The DWP refuses to confirm this figure but says pricing will be published “in due course”.
Speaking at a Headlinemoney event last week, pensions minister Steve Webb said the scheme will be particularly beneficial to women.
He said: “I’ve had pensioners say to me, ‘I’m getting a lousy return on my savings, Steve, please can I give you my money?’ And I felt I had been saying no for too long.
“The basic proposition is they give us their money, we ask the Government actuary what that equates to as a flow of income and from a Government point of view that is a neutral transaction.
“It seems to me this is especially good news for women as we will have to choose a unisex price but obviously the woman on average will get a pension for longer than a man and couples who have some capital between them may well want to use that capital to boost the woman’s pension as on average they are less likely to be a taxpayer than a man.”
Hargreaves Lansdown head of pensions research Tom McPhail says: “On the open market, an inflation linked single life annuity for a 65 year old currently costs £1,468 for each £1 a week of income.
“This suggests that the Government may be offering this new scheme on very generous terms.”