HC Deb 16 July 1998 vol 316 cc287-8W
Mr. Cousins

To ask the Secretary of State for Social Security what are the range of maturity values at two years and 10 years after commencement of the pension plans of each approved personal pension plan provider; and what assessment she has made of variations of maturity values, and the reasons for them, under the pensions review. [47728]

Mr. Denham

[holding answer 29 June 1998]: The information is not available in the format requested. Such information as is available is set out in the table.

£
Pension fund Maturity value with 2 years contribution Maturity value with 10 years contribution
Scheme 1 5,800 28,400
Scheme 2 5,200 26,200
Scheme 3 5,000 25,400
Scheme 4 4,400 22,300
Scheme 5 4,300 22,400

£
Pension fund Maturity value with 2 years contribution Maturity value with 10 years contribution
Scheme 6 4,100 21,000
Scheme 7 3,800 22,700
Scheme 8 3,600 23,4000
Scheme 9 3,300 27,6000
Scheme 10 2,800 20,3000

Notes:

  1. 1. Amounts have been rounded to the nearest £100
  2. 2. The table shows maturity values upon retirement at age 65 of ten modelled Appropriate Personal Pension (APP) funds and are based on the characteristics of actual providers
  3. 3. They are based on an individual who contracts-out of SERPS at the age of 30 at the beginning of the 1997/98 financial year for 2 and 10 years with all National Insurance rebates accrued during this time being paid into the APP
  4. 4. Fund values are expressed in constant 1997 prices
  5. 5. The following assumptions have been made:
    1. (a) that the National Insurance rebates, and associated tax relief, paid over the 2 and 10 year periods are the only contributions ever made;
    2. (b) that the individual was earning the national average level of full-time earnings in Great Britain at the time the APP commenced in April 1997;
    3. (c) that earnings increase at a rate of 1.5 per cent. a year above inflation;
    4. (d) that the rate of return on the pension fund assets (before charges are deducted) is 4.5 per cent. a year above inflation;
    5. (e) that National Insurance rebates are paid into the pension fund halfway through the following tax year in which the earnings to which they relate were accrued;
    6. (f) that the retirement age of 65 is also the retirement age specified in the personal pension policy (penalties may be incurred if an individual retires before a specified scheme retirement age); and
    7. (g) that the sample funds accrue the same rate of return on fund assets before charges are deducted

Mr. Flynn

To ask the Secretary of State for Social Security if she will estimate the present weekly value of the basic pension for a single person and a married couple had it been increased in line with earnings since 1980. [50863]

Mr. Denham

If the basic State Retirement Pension had been increased by the higher of earnings or prices since 1980, the weekly rate would now be £89.60 for a single pensioner and £143.40 for a married couple.Notes:

  1. 1. The Retail Price Index (RPI) (All items) and the Average Earnings Index (Whole Economy) as supplied by The Office for National Statistics were used in this calculation.
  2. 2. The figures have been rounded to the nearest 5 pence at each uprating.
  3. 3. The rate of basic Retirement Pension was increased in the April 1994 uprating by 50 pence for a single pensioner and 70 pence for a couple on account of VAT on fuel. This increase has not been added in to these illustrative figures.
  4. 4. For the calculation where State Retirement Pension was linked to the higher of RPI and earnings, the earnings index was the higher figure except in 1982, 1984, 1991 and 1996, when the RPI was used.