§ Mr. Malcolm BruceTo ask the Secretary of State for Social Security what would be the cost of abolishing the contributory principle for state pensions. [22777]
§ Mr. HealdThe additional cost in 1996–97 of paying the basic state retirement pension at the full rate of £61.15 to all individuals over state pension age in Great Britain is estimated at £4 billion.
Notes:
- 1. A gross cost of £5.5 billion is estimated by calculating the total cost of a Pension of £61.15 per week for everybody over state pension age in the GB population and deducting the estimated cost of the contributory benefits currently payable to those people. The net cost of £4 billion takes account of the effects on income-related benefits.
- 2. The estimated cost assumes that additions to basic retirement pension (adult dependency increases, increments, graduated pensions, age addition and invalidity addition) will continue to be paid and that overseas pensioners continue to get all benefits under the current rules.
- 3. It is not possible to estimate the costs of making the state earnings-related pension scheme (SERPS) non-contributory as it is an earnings-related scheme.
- 4. All costs are in 1996–97 prices, rounded to the nearest £0.1 billion and are based on the September 1995 public expenditure settlement.
Source:
Government Actuary's Department.