HC Deb 17 January 2002 vol 378 cc455-6W
Lynne Jones

To ask the Secretary of State for Work and Pensions what are the projected additional annual costs at current prices for each of the next 35 years for(a) the annual uprating of the minimum income guarantee in line with average earnings, (b) the pension credit, (c) raising the level of the basic state pension to the level of the MIG for (i) all pensioners, (ii) all pensioners over 75 and (iii) all pensioners over 80 years and (d) the annual uprating of the state second pension in line with average earnings. [20235]

Mr. McCartney

The information requested for the minimum income guarantee and the pension credit is set out in the paper "The Pension Credit: long-term projections" which has been placed in the Library today. Copies are also available in the Vote Office.

The additional information requested is set out in the tables.

Annual costs in 2001–02 prices of increasing the basic state pension to the level of the minimum income guarantee and then uprating by earnings thereafter
£ billion
All Over 75s Over 80s
2002 8.5 3.8 2.2
2005 10.7 4.7 2.8
2010 15.8 6.6 3.9
2015 21.3 8.9 5.3
2020 27.5 12.1 7.0
2025 36.8 17.3 9.6
2030 48.6 22.2 13.6
2035 61.0 28.5 17.1
2050 92.3 51.4 34.1

Source:

The Government Actuary's Department

Annual costs in 2001–02 prices of earnings uprating state second pension
£ billion
State Second Pension
2002 0.0
2005 0.0
2010 0.0
2015 0.1
2020 0.3
2025 0.7
2030 1.2
2035 2.0

Notes:

  1. 1. The costs of increases in the basic state pension and state pension are net of income related benefit savings that would be generated by these increases.
  2. 2. The costs given for earnings uprating of state second pension assume that expenditure on SERPS (accruals up to 2001–02) would not be affected.
  3. 3. The costs of earnings uprating of the state second pension only begin to become significant by 2015 because S2P only begins accruing in 2002–03 and therefore the amount of S2P in payment will be negligible for some time after that.
  4. 4. The costs shown for state second pension in the table have been calculated based on the estimated costs of S2P which were shown in the report by the Government Actuary on the Financial Effects on the National Insurance Fund of the Child Support, Pensions and Social Security Bill 1999 (Cm 4573). The costs shown are the increase in expenditure over and above the baseline projected S2P expenditure shown in this report.
  5. 5. It has been assumed that the basic state pension and state pension changes would not happen together. If they did, there would be an interaction because the Lower Earnings Limit is linked to the basic state pension. This means that the cost of S2P would be reduced if the basic state pension and, therefore, the LEL were raised.
  6. 6. Average earnings are assumed to grow in line with Treasury economic assumptions until the end of the Parliament and then 1.5 per cent. above inflation over time.
  7. 7. The pensioner population is assumed to grow according to GAD's central population growth estimates.

Source:

The Government Actuary's Department

Mr. Boswell

To ask the Secretary of State for Work and Pensions what is the take-up rate for the minimum income guarantee for pensioners. [27668]

Mr. McCartney

Estimates of take-up for the minimum income guarantee (MIG) by pensioners were published in "Income Related Benefits—Estimates of Take Up in 1999–2000", a copy of which is available in the Library.

As at August 2001 there were 1.736 million pensioners receiving the MIG.