Around a million people who plan to retire early could get a £237 per year boost to their state pension. And that bonus will be increased every year, in line with inflation. And the cost is only £741 this year – giving an annual return on investment of around 30%.
ThisIsMoney reports –
“The returns make it tempting for those with small private pensions, or spare savings earning very little interest, to cash in and buy more government-guaranteed state pension… Anyone who is under state pension age, retired and is projected to receive a state pension of less than £159.55 per week could potentially benefit… The opportunity comes from a wrinkle in the complex transition arrangements from the old to the new state pension… The Government looks at how much old basic state pension has been earned. This may be up to £122.30 per week for those with 30 years or more of National Insurance credits up to April 5, 2016… It then adds extra pension from top-up schemes such as state earnings-related pension or state second pension (S2P).If the total is less than the £159.55 per week rate of the new state pension, it is possible to continue building it up.”