§ Lord Mottistoneasked Her Majesty's Government:
What would be the estimated exta cost to the Exchequer in 1988–89 if all the state pensions which have been deferred past the ages of 65 (for men) and 60 (for women) were paid, when taken up, at the rate necessary to ensure that the full cash value forgone can be recovered by the age of death expected at the age of taking up the pension, instead of the present system, described in their answer to Lord Mottistone's Question on 14th May 1987.
§ The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Skelmersdale)The incremental system described would produce an estimated saving of about £75 million in 1988–89, assuming annual upratings at 5 per cent. a year after April 1988. This figure takes no account of the value to pensioners of provisions for the inheritance of increments. The calculation has been made, as requested, on the basis of the cash value of pension forgone and does not include an allowance for interest. Interest was included in the reply to the earlier Question to which the noble Lord refers, and accounts for the difference in outcome between the two replies.