§ Mr. KirkwoodTo ask the Secretary of State for Social Security if he will estimate the annual cost by the year 2030 of calculating entitlement to benefits under the state earnings-related pension scheme if a disregard was introduced for the final five years of earnings, but only if this disregard does not diminish the SERPS payment; and on what basis he estimates this cost. [31936]

81W

§ Mr. ArbuthnotThe annual cost by the year 2030 of calculating entitlement to SERPS if a disregard was introduced for the final five years of earnings; and the denominator in calculating SERPS is also reduced by 5, is estimated to be about £2 billion in 2030–31.

Notes:

1. The cost is in 1994–95 prices and is the estimated increase in Retirement Pension expenditure.

2. This estimate is consistent with the figures in the Government Actuary's Report on the Pensions Bill 1994 and in the Government Actuary's Quinquennial Review on the National Insurance Fund.

3. This assumes that the increase in SERPS entitlement would apply equally to contracted-out and not contracted-out individuals.

4. This assumes SERPS accrues up to the financial year prior to reaching age 60 at an accrual rate of 20/44 per cent. rather than at a rate of 20/49 per cent. up to the year before reaching age 65.

§ Mr. KirkwoodTo ask the Secretary of State for Social Security if he will estimate the annual cost by the

Thousands Contracted-in only Mixed contracted-in/contracted-out Reckonable earnings in 1992–93 Men Women Men Women £10,000 per year and over 1,287 485 370 218 £20,000 per year and over 211 33 88 32 Source:

1 per cent. sample from National Insurance Recording System.

§ Mr. KirkwoodTo ask the Secretary of State for Social Security if he will estimate the annual costs of phasing in the reduction of the entitlement to the additional pension to a widow or widower over a 10-year period between 5 April 2000 and 6 April 2010 in 5 per cent. annual increments; and on what basis he estimates this cost. [31934]

§ Mr. ArbuthnotThe information is in the table:

Year Cost £ million 2005–08 350 2010–11 400 2015–16 300 2020–21 200 1. The cost is in 1994–95 prices and is the estimated total increase in retirement pension expenditure.

2. The estimate assumes that the increased level of additional pension would apply equally to contracted-in and contracted-out contributions.

3. This estimate is consistent with the assumptions and projections in the Government Actuary's report on the Pensions Bill 1994 and in the Government Actuary's Quinquennial Review on the National Insurance Fund.