The Government is set to confirm details of a scheme to allow existing pensioners to boost their state pension entitlement by up to £25 a week.
Under the plan, 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.
According to The Daily Mail, the Government will increase peoples’ weekly state pension by around £1 for every £900 paid in. A senior Government source confirms this figure is “in the right ball park”, with full details to be published in the coming weeks.
Speaking at a Headlinemoney event last week, pensions minister Steve Webb said the scheme will particularly benefit women.
He added: “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.”
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 the Government may be offering this new scheme on very generous terms.”