SJD Accountancy

Contractors can now top up state pensions

Request Callback

On October 12th 2015 the government introduced a new scheme which has given more than 7 million Brits the chance to top up their state pension by up to £1,300 a year.

It is thought that 265,000 people will pursue the scheme and it will be most sought after by the self-employed. Reports state that self-employed workers could treble their income. For example, if you pay in a £10,000 lump sum, it could give you an extra £11 a week or £572 a year before tax. This is compared to putting aside the same amount in an average savings bond at a 1.8 per cent, which would pay out around £180 per year before tax.

These additional payments made under the Class 3A national insurance contributions will be guaranteed for life and at least half of the additional pension can be inherited by a surviving partner once they have reached state pension age. Any additional pension contributions will also be inflation-proof which means the money will rise in line with the consumer price index (CPI).

There are concerns that some people have just missed out on the new top up scheme, however the government are tackling this with the new higher flat rate pension. Women born before April 6th 1953 and men born before April 6th 1951 can opt into this scheme as it will run for 18 months (due to finish April 2017).

The Department for Work and Pensions have released a statement explaining that people who have signed up for these pension schemes will be receiving an information pack later in the year. Although for your own peace of mind it is probably best to speak to an accountant about your options.

For contractors who want to think about tax planning, our FREE 60 page guide to contracting has plenty of advice on how to plan ahead. We also have a range of contractor case studies which are written by professionals who are currently contracting in the UK.

If you have any questions about contracting or would like any further advice, please call our New business team 01442 275789 or email:

For all other news please visit our Contractor News hub, or why not join us on Facebook and follow us on Google+ for all the latest contractor news, views, debates and competitions. 

Request a Call Back

We want you to know exactly how our service works and why we need your details. Please read our Privacy Policy before you continue.