The new flat rate State Pension was introduced on 6 April 2016. Because those who reached state pension age before this date would not benefit from the new pension, the State Pension top up scheme was introduced. It is available to all pensioners who had reached their state pension age by April 2016.
However, this scheme only runs until 5 April 2017, so anyone looking to take advantage of it needs to act soon.
If you qualify, then the scheme gives you the option to boost your State Pension by up to £25 per week by making a one-off lump sum payment. The size of the payment is based on how much extra pension you wish to purchase, and your age. The payment required reduces for older pensioners.
By way of examples, to purchase £1 per week (£52 per year) of additional State Pension the payment is £890 if you are 65, or £674 if you are 75. The payment takes the form of voluntary Class 3A National Insurance contributions.
Finally, while noting that the scheme closes on 5 April 2017, any application now will have 30 days to make the actual payment, and a 90 day cooling off period applies if you change your mind.
So, should you take advantage of this last minute offer?
Before you can answer this you need to answer another question: are you entitled to a full basic State Pension, by virtue of having 30 qualifying years of National Insurance contributions? (You can find out the answer by telephoning the Pension Service on 0800 731 7898). If the answer is no, then you may be able to top up your State Pension by buying extra years, though time limits apply.
These extra years are paid by making voluntary Class 3 National Insurance contributions (rather than 3A), and it is generally agreed that for those who can make Class 3 contributions these represent better value than Class 3A.
For those who reached their State Pension age prior to 6 April 2016, and wish to consider topping up their State Pension, then exploring eligibility to make Class 3 contributions should be the first step. Beyond that, everyone in this age bracket can then consider whether or not to make Class 3A contributions, albeit time is running out for this second option.
And some final notes of caution. If you are receiving any means tested benefits then topping up your state pension may not be worthwhile (you gain in state pension, but lose via other benefits). And any lump sum top up is based on the expectation that you live long enough to reap the benefit, so a top up may be less attractive for those in poor health.