§ Mr. Cousins
To ask the Secretary of State for Social Security what was the cost to the national insurance fund of incentives to take up contracted out personal pension plans in the financial years 1989–90; and if he will provide estimates for 1990–91 and succeeding years.
§ Mrs. Gillian Shephard
The cost to the national insurance fund in 1989–90 of the 2 per cent. incentive payments to personal pensions was about £680 million; this represented payments of incentives in respect of both of the years 1987–88 and 1988–89.
By the end of the year 1989–90 a little over 4 million personal pensions were in force. Assuming that the number in force remains constant through to 1992–93 the estimated cost in 1990–91 is £500 million (relating to year 1989–90) and in the years 1991–92 to 1993–94 (relating to years 1990–91 to 1992–93) the estimated cost can be expected to rise in line with general increases in earnings.