§ 55 and 56. Sir T. Beamishasked the Secretary of State for Social Services (1) what proportion of the full flat-rate pension to which a self-employed man is entitled on his retirement today with the required yearly average of 50 contributions paid or credited since 1948, is covered by the recipient's contribution and by general taxation, respectively, showing a married and a single man separately and assuming an average expectation of life; and what is the latter amount shown as a capital sum;
(2) what proportion of the full flat-rate pension to which an employed man is entitled on his retirement today with the required yearly average of 50 contributions paid or credited since 1948, is 187W covered by the employer's contribution, the employee's contribution and general taxation, respectively, showing a married and a single man separately and assuming an average expectation of life; and what is the last amount shown as a capital sum.
§ Mr. EnnalsRetirement pension is paid from the National Insurance Fund which is financed on a pay-as-you-go principle. About 83 per cent. of the income of the fund comes from current contributions by insured persons and employers and about 15 per cent. from general taxation by way of the Exchequer supplement.
On an actuarial calculation, assuming 5 per cent. interest, the proportion of a self-employed man's present flat-rate pension covered by his past contributions, if he retires today having paid 50 contributions a year since 1948, would be 13 per cent. for a married man, including pension rights for a wife five years younger than himself, and 26 per cent. for a single man. The amount of flat-rate pension not covered by his own contributions, shown as a capital sum, would be £3,550 and £1,450 respectively.
For an employed man in corresponding circumstances, 8 per cent. of his flat-rate pension would be covered by his own past contributions, including an appropriate part of maximum graduated contributions assumed to have been paid since 1961, and 8 per cent. by his employer's. For a single man the proportion in each case would be about 18½ per cent. The amount of flat-rate pension not covered by his own and his employer's contributions, shown as capital sum, would be £3,400 and £1,250 respectively.