§ Sir George Young
asked the Secretary of State for Social Services what would be the current level of retirement pension for a single person and a married couple if the joint rate of contribution were currently 18½ per cent. and if the Treasury supplement remained at 18 per cent. of contribution income.
§ Mr. O'Malley
If benefits other than retirement pension, widows' benefits and invalidity pension were retained at their present levels, the income, after allowing 1.2 per cent. for the National Health Service and the Redundancy Fund, would currently be sufficient to meet the cost of pensions of £16 for a single person and £25½50 for a married couple under the existing scheme.
§ Mr. Woof
asked the Secretary of State for Social Services (1) what would be the estimated cost to the Exchequer of pensions on the basis that the retiring age of men were reduced to 60 years;
(2) what would be the estimated increase in contributions needed to pay pensions to men at 60 years of age.
§ Mr. O'Malley
The cost of lowering the pension age would depend on the extent to which men retired at the lower age. On the assumption that the pattern of retirement during the first five years 183W after the lower age would be the same as it is now between 65 and 70, the cost of retirement and supplementary pensions at the current rates of benefit would be of the order of £6,200 million a year compared with £4,950 million a year at the present pension age.
To meet the extra cost of benefits and to make good the loss of contribution income, contributions would have to be increased from 5.5 per cent. to 6.7 per cent. for employees and from 8.5 per cent to 10.3 per cent. for employers. This assumes the normal 18 per cent. Treasury supplement.