HL Deb 05 May 1998 vol 589 c64WA
Baroness Castle of Blackburn

asked Her Majesty's Government:

What would be the cost in terms of contribution rates of uprating the basic pension on an index mid-way between prices and earnings, assuming that the lower earnings limits and the upper earnings limits are linked to earnings. [HL1542]

Baroness Hollis of Heigham

The information requested is set out in the table.

Projected Class 1 Contribution Rate
Year Contribution rate under current pension arrangements Contribution rate uprating basic retirement pension by mid point between earnings and prices from 1999–2000 and indexing lower and upper earnings level in line with earnings
2000/2001 17.7 per cent. 17.9 per cent.
2010/2011 17.4 per cent. 18.4 per cent.
2020/2021 16.8 per cent. 18.4 per cent.
2030/2031 17.2 per cent. 19.6 per cent.
2040/2041 15.8 per cent. 18.7 per cent.
2050/2051 14 per cent. 17 per cent.


1. The Government Actuary's Department Quinquennial Review [HC 160].

2. Government Actuary's Department.


1. The contribution rates are those required by the National Insurance Fund in order to provide sufficient income to balance expenditure on benefits and the costs of administration.

2. The rates are the main rates of Class 1 contributions i.e. the sum of the employee rate on earnings above the lower earnings limit and the upper rate for employers. It is assumed that all contribution rates are increased proportionately. The contribution rates shown are for the National Insurance Fund and exclude the National Health Service allocation.

3. The cost of uprating linked benefits on an index mid-way between prices and earnings has not been included.

4. Estimates are based on the 1995 Pensions Act regime. Subsequent data and policy changes has not been taken into account.