§ Mr. Webb
To ask the Secretary of State for Social Security if he will estimate the combined value of a full basic state pension and the maximum possible second state pension as a proportion of the value of the minimum income guarantee in(a) 2040, (b) 2050 and (c) 2060 based on current assumptions about the indexation of each of these benefits. 350W
§ Mr. Timms
The information is in the table.
The combined value of a full basic state pension and the maximum possible state second pension (i.e. a person who has earned at or above the upper earnings limit throughout their working life), as a proportion of the minimum income guarantee (MIG) for a person retiring in the years indicated Year of retirement State retirement pension as a percentage of the MIG 2040 132 2050 117 2060 110
1. The individual concerned is assumed to work for 49 years from age 16 and retire at age 65 in the years indicated, earning at or above the Upper Earnings Limit for National Insurance contributions throughout their working life.
2. Earnings are assumed to grow 1.5 per cent. faster than prices.
3. It is assumed that State Second Pension is introduced in 2002.
4. It is assumed that the individual concerned remains contracted-in to the State Second Pension when the second stage is introduced (assumed to be in 2006) although, on the assumptions stated, it would be in the individual's interests to contract out.