§ Mr. Ian Lloydasked the Minister for the Civil Service what he estimates to be the capitalised value of the guaranteed inflation-proof pension at current interest and inflation rates of (1) a Deputy Secretary, (2) an Assistant Secretary and (3) a Principal in his Department.
§ Mr. Charles R. MorrisThe pension of an individual civil servant depends on his length of service and his pay duringthe last year of service. Therefore it is convenient to answer in terms of a given level of pension.
On the unreasonable assumption that the annual rate of inflation and the interest rate on long-term fixed-interest investments were to remain at their present levels over the next 40 years the capital value of a £1,000-a-year pension to a male civil servant retiring at age 60 would be about £35,000.
It is not reasonable, however, to assume that the present imbalance between the rate of inflation and the rate of interest could be sustained for this length of time.
On the more likely assumption that, over the longer term, the rate of inflation will be lower than interest rates, the capital value of a pension starting at £1,000 a year is estimated to be £12,500.