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Budget 2014: 12 predictions
by Michelle McGagh on Mar 17, 2014 at 09:10
Single-tier state pension
More detail is expected to emerge on the plan to allow those already retired or retiring before 6 April 2016 to top up their national insurance ‘stamps’ in order to receive an increased state pension.
The government has said it will introduce a new class of NI; 3A that will be able to be bought from October 2015 to 6 April 2016, after which the new single-tier flat rate pension of £144 a week will be introduced.
‘For a limited period those over state pension age on 6 April 2016 with less than a full entitlement [to the state pension] will be able to buy extra pension of up to £25 per week,’ said Bull. ‘It will not be cheap – the value is to be actuarially fair, and will vary according to the age of the pensioners. The Treasury will set the price.’
Class 3A contributions could help those who have not worked due to periods of unemployment, or women who stayed at home to raise children, to increase their weekly state pension.
It is hoped the chancellor will use the Budget to set out the cost of purchasing extra years.
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