A scheme allowing pensioners to top up their flat-rate state pension through voluntary National Insurance contributions (NICs) is expected to raise £850m over two years.
People reaching 65 before the flat-rate state pension takes effect on 6 April 2016 will be able to buy credits "at an actuarially fair" price, boosting their payments by a maximum £25 a week, HM Treasury's Budget 2014 document confirmed.
The scheme will run for 18 months from October 2015. HM Treasury's predicts it will bring £415m into the exchequer in 2015/2016, with a further £435m expected in 2016/2017.
The new NIC 3A category was announced alongside the reformed state pension, targeting people with gaps in their additional state pension record, such as self-employed workers or women with intermittent work histories.
Further details are expected from the Department for Work and Pensions (DWP) in due course.
Chancellor George Osborne used this year's budget to bring in sweeping reform of defined contribution (DC) pensions, including the promise that "nobody will have to buy an annuity" due to relaxed rules on drawdown and a guarantee of free impartial advice.
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