HC Deb 21 June 1938 vol 337 cc907-9W
Sir J. Smedley Crooke

asked the Minister of Health whether he will state the number of insured persons, male and female, who were receiving pensions under the Old Age Pensions Acts, and the Widows', Orphans', and Old Age Contributory Pensions Act at the end of 1937; the amounts received during that year; the sources from which the money came; the capital sum set aside as an assurance; and what bearing that has on the assured persons?

Mr. Elliot

At 31st December, 1937, 1,067,887 men and 914,461 women, in Great Britain, were in receipt of old age pensions under or by virtue of the Widows', Orphans', and Old Age Contributory Pensions Act, 1936. Of these, 506,638 men and 302,700 women were in receipt of pensions between the ages of 65 and 70, and 561,249 men and 611,761 women of over 70 pensions under the Old Age Pensions Act, 1936, by virtue of the Contributory Pensions Act. In addition, pensions or allowances were in payment, at 31st December, 1937, in respect of 797,611 widows and 298,054 children and orphans.

All the men concerned were insured persons. Of the women, some were themselves insured, while others received pensions as the wives, or widows, of insured men.

It is estimated that the amounts paid in respect of pensions of these types during the year ended 31st December, 1937, were as follow:

  1. (a) pensions between the ages of 65 and 70 —£21,000,000;
  2. (b) pensions to persons over the age of 70—£29,500,000;
  3. (c) pensions and allowances to widows and orphans—£24,000,000.

The amounts under (a) and (c) were charged (in accordance with the pro. visions of Sections 14 (1) and 44 (4) of the Contributory Pensions Act, 1936) to the Pensions Accounts set up under that Act, the income of which is derived from the contributions of insured persons, their employers and the State.

In accordance with the proviso to the above-mentioned Section 14 (1), the amounts under (b) were provided wholly from moneys voted by Parliament.

No capital sum is specifically provided by the Contributory Pensions Act in respect of future liabilities, since the method by which the scheme is financed is, in essence, the payment of contributions in approximately equal proportions by insured persons and their employers, together with an annual payment from the Exchequer to meet the excess of the expenditure in benefits over the receipts from contributions. During the first few years, until the scheme became fully operative, a temporary balance was accumulated, the expenditure on benefits being less than the receipts. This balance has been rapidly absorbed since 1931 owing to the growing cost of pensions, and it is estimated that it will be exhausted in the next few years. The contributions which the Act imposes on the Exchequer until the year 1945–46 are, in effect, annual instalments on a rising scale of the amount estimated to be required down to that year to provide the balance of expenditure over income. The Exchequer contribution for the year ended 31st March, 1937, was £15,000,000.

A review of the financial working of the Contributory Pensions scheme during its first decennium, 1926–35, will be found in the report of the Government Actuary (H.C.82 of 1935) of which I am sending my hon. Friend a copy.

Forward to