Class 3A Voluntary contributions

Posted on by tfp in Pensions Post Retirement

In the 2014 Budget it was announced that as from 12 October 2015, individuals who have entitlement to a UK State Pension and reach State Pension Age before 6th April 2016 can make a new lump sum ‘Class 3A voluntary National Insurance Contribution’ to purchase an additional amount of state pension.

The maximum additional pension that can be purchased is £25 per week (£1,300 p.a.) which will increase in line with CPI and have a 50% spouse/civil partner pension. The cost will depend upon the client’s age. For example the cost of providing the maximum additional income is expected to be;

Age Cost % Return
65 £22,250 5.84%
70 £19,475 6.67%
75 £16,850 7.71%


This represents good value in the current annuity market and should certainly be mentioned to those clients who qualify, although you do have to bear in mind that they will lose access to the capital.

The opportunity to purchase the additional pension will be available 12th October 2015 to 1st April 2017. To find out the cost for a client go to the calculator on HMRC website;