§ Mr. AllenTo ask the Secretary of State for Social Security if he will estimate the total cost to the national insurance fund, in the financial year 1991–92 and in a full year, of allowing people to contract out of SERPs into a money purchase personal pension scheme giving figures separately for(a) people contracting out of SERPs in 1991–92 and (b) all schemes, giving figures also for Great Britain and the United Kingdom.
§ Miss Widdecombe[holding answer 30 April 1991]: The amount of revenue forgone by the national insurance fund is made up of the contracted-out rebate which was first introduced in April 1978, and the 2 per cent. incentive payment introduced in April 1988.
The Government Actuary estimates that about 0.5 million people will receive payments towards personal pensions for the first time during 1991–92 and the estimated amount of revenue forgone by the national insurance fund in respect of those people will be £260 million for Great Britain, made up of £190 million rebate and £70 million incentive.
The estimated amount of revenue forgone in respect of the total of 4.5 million who will receive payments during 1991–92 will he £2,350 million for Great Britain, made up of £1,740 million rebate and £610 million incentive.
Information relating to Northern Ireland is a matter for my right hon. Friend the Secretary of State for Northern Ireland.
§ Mr. AllenTo ask the Secretary of State for Social Security if he will estimate the total cost to the national insurance fund in the financial year 1991–92 and in a full year of the 2 per cent. banded earnings offered as an incentive to opt out of SERPs, giving figures for Great Britain and the United Kingdom.
§ Miss Widdecombe[holding answer 30 April 1991]: In the year 1991–92 the Government Actuary estimates that the amount of revenue forgone by the national insurance fund as the result of the incentive payment will be £750 million for Great Britain. This is in respect of an estimated 4.5 million personal pension optants and 1 million members of contracted-out occupational pension schemes who are eligible for incentive payments.
The estimated amount of revenue forgone by offering the incentive in 1991–92 amounts to about 2 per cent. of the total income of the national insurance fund.
It is also estimated that encouraging people to plan for their retirement in this way will result in a reduction in gross public expenditure of £2 billion a year in 2010 rising to £14 billion a year in 2035.
Information relating to Northern Ireland is a matter for my right hon. Friend the Secretary of State for Northern Ireland.