In October 2015 the Government will introduce a new class of voluntary NICs, to be known as Class 3A, to allow eligible individuals an opportunity to top up their Additional State Pension. The Government will legislate for this new class at the earliest available opportunity.
Class 3A offers the option to top up state pension entitlement. The price will be set at an actuarial rate. The details, and price, of the new Class 3A scheme will be set out later.
Who will be affected?
Current pensioners and individuals who will reach state pension age before 6 April 2016.
The scheme will open in October 2015 and will be time limited.
Under the current state pension system, certain groups, such as the self employed, had poorer state pension outcomes. Those who are at, or who will reach state pension age before the new single tier state pension scheme starts, will continue to receive state pension in line with present rules.
Currently, the full amount of basic state pension is £110.15 per week, and pensioners may receive an additional state pension which is linked to earnings on which NIC was paid. From 6 April 2016, the new single tier pension will be paid at £144 per week, subject to transitional provisions.
As a result of this measure eligible individuals will now be permitted to buy additional state pension entitlement. We await further details of the new Class 3A proposals.