Have you ever had a career break? If so, you might be able to buy chunks of extra state pension through voluntary national insurance contributions, chancellor George Osborne announced last week in the Autumn Statement. Here's why if you've worked for less than 35 years - the new scheme looks like a sterling opportunity to boost your pension for the rest of your life.
Who can top up their state pension?
Retired people and those reaching retirement age before April 2016 who have not worked enough years to be eligible for the state second pension (an earnings-related top-up that will be abolished in April 2016). The requirement for a full state pension and additional state second pension is 35 years.
Why should you do it?
If you've had periods in your life where you haven't worked and paid NIC contributions, you might not be eligible for a full state pension. But you can take advantage of this new scheme, which will allow you to top it up.
Does it look like good value for money?
Hargreaves Lansdown figures show that if you are one year short of receiving the full basic state pension you could pay £705 for a year's NICs. This will buy you £190 a year in extra basic state pension for the rest of your life. You would only have to live for four years to get your money back, so, given that most people can expect to live for more than 20 years in retirement, this looks like a very generous deal.
The current basic state pension is £110.15 a week and the maximum you can claim in state second pension for is £163 a week (2013-14) in addition to your basic state pension. This makes a total of £273.15.
When can you start paying in?
The new NICs will be introduced in October 2015 and run for a limited time.
