The cut in the Bank of England base rate to 0.25% in August reminds us that it is becoming ever more difficult to generate a meaningful income from cash deposits.
The option for those already receiving the State Pension to buy up to an extra £25 per week remains available until 6th April 2017. To be eligible you must be entitled to State Pension and be:
As an example for a woman aged 68, the additional £25 per week for life (£1,300 per year) would cost £20,675 – equivalent to an investment return of 6.28% p/a:
Putting aside cynicism about future Government policy and the point that having done their best to abolish the annuity market by introducing pension reforms last year, the Government has arguably gone into the annuity business themselves, this may be worth considering for those who:
More information is available at https://www.gov.uk/state-pension-topup/y
The information above is based on our current understanding of HM Revenue & Customs guidance. Tax relief is dependent on your own particular circumstances and subject to change. It is recommended that you seek professional advice before making any financial decisions.