National Insurance (Hansard, 14 October 1996)

§ Mr. Burt

[pursuant to the reply, 24 July 1996, c. 562–63]: The information given regarding the estimated contribution income from national insurance in table C was incorrect. The correct information is as follows.

The available information is in the tables.

Table (a): National Insurance Fund—Estimated contribution income [£ billion at 1994–prices] at present contribution rates for 1994–95, 2000–01, 2010–11, 2020–21 and 2030–31 as a percentage of estimated benefit expenditure [£ billion at 1994–95 prices] for those years.
	1994–95	2000–01	2010–11	2020–21	2030–31
Income	36.4	45.1	55.1	64.0	69.6
Expenditure	39.9	42.2	50.8	56.4	63.8
Income as a percentage of expenditure	91	107	109	113	109

Table (b): National Insurance Fund—estimated contribution income [£ billion at 1994–95 prices], assuming upper and lower earnings limits for Class 1 contributions linked with earnings, for 1994–95, 2000–01, 2010–11, 2020–21 and 2030–31 as a percentage of estimated benefit expenditure [£ billion at 1994–95 prices] for those years
	1994–95	2000–01	2010–11	2020–21	2030–31
Income	36.4	45.2	54.9	64.6	71.8
Expenditure	39.9	42.2	50.8	56.4	63.8
Income as a percentage of expenditure	91	107	108	114	113

Table (c): National Insurance Fund—estimated contribution income [£ billion at 1994–95 prices], assuming upper and lower earnings limits for Class 1 contributions linked with earnings and the upper earnings limit raised at 200 per cent, of average earnings, for 1994–95, 2000–01, 2010–11, 2020–21 and 2030–31 as a percentage of estimated benefit expenditure [£ billion at 1994–95 prices] for those years
	1994–95	2000–01	2010–11	2020–21	2030–31
Income	37.5	46.6	56.7	66.7	74.2
Expenditure	39.9	42.2	50.8	56.4	63.8
Income as a percentage of expenditure	94	110	112	118	116

1.The information given in the tables has been derived from the Government Actuary's Reports on the Third Quinquennial Review under section 137 of the Social Security Act 1975 (HC 160) and on the Financial Provisions of the Pensions Bill 1994 (Cm 2714) by— adjusting the entries in tables E3 and E4 of HC 160 so that the projected contribution income is based on a continuation of the 1994–95 combined Class 1 contribution rate (18.25 per cent.). Hence, the tables give information for 1994–95 rather than 19959–6; adjusting contribution income for the years 2020–21 and 2030–31 to allow for the increased number of contributors expected as a result adjusting the amounts of contracted-out rebate to allow for the difference between rebate rates assumed in HC 160 and those now expected.

2.For table (c), a further adjustment has been made to allow for the change in primary Class 1 contributions and rebates following from increasing the UEL to twice average earnings.

3.The estimated benefit expenditure information given in all three tables is than consistent with increasing the UEL and LEL in line with prices, even where (in tables (b) and (c)) the contribution income figures are based on increasing those limits in line with earnings, and allows for the effects of the Pensions Act 1995.

Source:

Government Actuary's Department.