The National Pensioners Convention (NPC) has described yesterday’s announcement of plans to introduce a state pension top up for anyone who retires prior to April 2016 as “a bit of a gamble”.
Under the plans individuals will be able to pay additional contributions in order to secure extra weekly state pension income, up to a maximum of £25.
Someone aged 65 will be required to pay £890 extra to receive £1 a week back in additional state pension, but the NPC has pointed out that it will take over 17 years for them to start to gain from the deal.
Dot Gibson NPC general secretary said: “A 65-year-old pensioner will have to weigh up the likelihood of living beyond 82 in order to decide whether or not this new scheme will give them any benefit.
“For some it will, but the latest figures from the Office for National Statistics show that average life expectancy for men is 79 and for women 82. Given this, the top up scheme looks like a bit of a gamble.
“What the government is trying to do is get around the fact that existing pensioners, particularly women, are going to lose out after the new single-tier state pension of around £150 a week comes into force in April 2016.
“Millions of older women don’t have a state pension anywhere near that level. Rather than going for expensive top ups, the government should agree to include all those with 35 years contributions into the new scheme – regardless of whether they are already retired or not.”