§ Baroness Castle of Blackburn
asked Her Majesty's Government:
What level of contribution to a personal pension scheme would be needed to produce a pension of two-thirds of final salary of £15,000, £21,000, £30,000 and £40,000 per annum respectively. [HL1541]
§ Baroness Hollis of Heigham
The information requested is set out in the table.
The approximate levels of continuous flat-rate weekly contributions to a personal pension scheme between the ages of 25 and 65 that would be needed to produce a pension of two thirds of a final salary Final salary Annual pension Weekly contribution £15,000 £10,000 £39 £21,000 £14,000 £55 £30,000 £20,000 £79 £40,000 £26,667 £105
1. The figures use the assumptions made by the Government Actuary for the purpose of calculating National Insurance rebates as set out in the Government Actuary's report in command paper Cm 3888 (Review of certain Contracting-out Terms).
2. The actual level of contribution required to reach a given amount of pension will depend on actual investment performance. If the rate of return was higher than assumed by the Government Actuary, the actual contribution required to achieve the same pension would be lower.
3. The contribution levels have been rounded to the nearest pound and are expressed in 1997 prices. The annual pension levels are expressed in terms of 1997 income levels.
4. The amount of pensions shown is the personal pension only. Any basic State pension or SERPS entitlement is not included in the annual pension shown above.
5. The figures relate to an individual aged 25 in 1997.
6. It is assumed that the individual remains contracted-in to the State Earnings Related Pension Scheme (SERPS) throughout the period during which contributions to the personal pension are made and so does not receive any rebates for contracting-out.