For those who had opted out of the Second State Pension (SERPS - or what ever other name you have known it by) there may be a shock coming when they come to receive their pension.
Many civil servants, and others typically in final salary schemes were 'opted out' of the Second State pension - an amount included in the state pension of around £30 per week. What this means, is that instead of receiving £155 a week as their pension, they may receive less than £120.
Opting out, as was, effectively redirected some of their National Insurance contributions from the Second State Pension, and into their employers pension - so the benefits have not necessarily been lost - just accrued elsewhere. Having said that, to many, they may feel slightly hard done by, receiving around 80% of someone who didn't opt out.
The good news, is that something can be done about this, by making additional National Insurance contributions. This of course needs to done with a great degree of consideration, but, from the figures shown in the article below, a contribution of £733 could bring an increased annual pension of £231.40 (£4.45 per week).
Of course, as always with these sort of calculations, there is a gamble as to whether you will live long enough to make it worthwhile.
Put £700 in and get £5,000 out. That’s the deal potentially on offer to thousands of current and former public sector workers who can top up their state pension at “bargain basement” rates, according to former pensions minister Steve Webb.