§ Mr. Newton
asked the Secretary of State for Social Services if he will estimate the cost in 1975–76, at April 1975 pension rates, of the drop in deferred retirement arising from the increase in the earnings rule limit to £20 per week, giving both the gross cost to the National Insurance Fund and the public expenditure cost net of tax; and what assumption is used for purposes of this calculation about the proportion of the total drop in deferred retirement which was due to factors unconnected with the earnings rule.
§ Mr. Orme
It is estimated that the number deferring retirement in November 1975 was some 36,000 lower than the corresponding number a year earlier—, 7,000 were women and 21,500 of the men were married. (No information is available on the average number deferring retirement over the year 1975–76 compared with 1974–75.) The gross cost656W to the National Insurance Fund in 1975–76, at April 1975 pension rates, of 36,000 extra pensioners and their 21,500 wives, including the contributions from them and the associated Treasury supplement, is estimated to be £33 million. Of the benefit element of this cost—£31 million —roughly £11 million would come back to the Exchequer in income tax. Analysing the reasons for retirement is extremely difficult since a complex of factors will usually be involved in each individual's decision. Thus it would not be possible to say how many of these extra pensioners retired as a result of the relaxation of the earnings rule and how many retired on account of other factors.