Class 3A Voluntary National Insurance contributions

12 October 2015

The State Pension top up scheme has now been launched where anyone reaching State Pension age before 6 April 2016 will be given the opportunity to increase their State Pension by up to £25 a week.

The Class 3A voluntary NICs scheme was originally announced in the 2014 Autumn Statement. The new scheme will remain open for 18 months (from 12 October 2015 to 5 April 2017) as an option for existing pensioners to increase their state pensions, ahead of the introduction of the new State Pension in April 2016.

To top up with the scheme, individuals must be entitled to the basic State Pension or Additional State Pension. Men aged 65 or older (born before 6 April 1951) and women aged 63 or older (born before 6 April 1953) will be able to buy additional State Pension, worth up to £1,300 a year. The State Pension top up not only provides extra income, it is also guaranteed for life, protected against inflation and inheritable in most cases.

The cost of a State Pension top up is based on a person’s age and takes average life expectancy into account. For a 65-year-old, an extra £10 of pension a week will cost £8,900, whereas for a 75-year-old the contribution rate for the same amount of pension is £6,740. Contribution rates decrease with age, so a person should consider whether to wait until their next birthday to apply.

If there are gaps in people’s National Insurance record, it may be more cost effective to make voluntary contributions first.

There is a State Pension top up calculator available which illustrates the contribution rates based on age and the additional amount someone wishes to receive.

Further information on the State Pension top up is available through GOV.UK.