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PBR: Women could get a pension worth £30,656 for only £421

Standard Life says that women with an incomplete national insurance record could get a return on investment of up to 7,200 per cent if they buy back extra years.

But the life office says that consumers should move fast to take advantage of the deal before the buy-back price rises in April 2009, as announced yesterday in the pre-budget report.

Women with less than 10 qualifying years of national insurance are entitled to no basic state pension, but as soon as they reach 10 years they are entitled to 26 per cent of the full basic state pension.

If a woman only has 9 qualifying years, the cost of buying Class 3 NI contributions to get an extra year and qualify for 26 per cent of the full pension is only £421.20.

But if they were to buy an index-linked pension on the open market to draw the same amount per week, it would cost £30,656.

Standard Life says even if a woman already has 10 qualifying years, it could still be worthwhile to buy extra years.

Head of pensions policy John Lawson says: “Women looking to take advantage of this deal should act fast. The Government has cottoned on to the fact that Class 3 contributions are a give away and plan to raise prices.

“It was announced in the pre-Budget Report that the weekly price for Class 3 contributions will rise to £12.05 per week from April 2009. This represents a rise of nearly 50 per cent. Women seeking to buy extra years should do so now.”


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