§ Paul FlynnTo ask the Secretary of State for Work and Pensions what would be the weekly savings required to provide the retirement incomes shown in Figure 3.1 of the pensions Green Paper (Cm 5677) if the rate of return on savings exceeded earnings growth by 1.5 per cent. and 2.5 per cent. respectively. [89645]

§ Mr. McCartneyFigure 3.1 of the Green Paper Simplicity, security and choice: working and saving for retirement (Cm 5677) is reproduced in the following two tables under the alternative assumptions about the rate of return on saving. Each of the two tables shows the required level of weekly saving in order to generate a given target income in retirement. The level of saving is in net terms, i.e. before the addition of tax relief at the basic rate, while the target income is in gross terms, i.e. before the deduction of any tax liability. Apart from the revisions to the assumption about the rate of return all other relevant assumptions are as set out in Annex 5 of the Green Paper.

264W

Table 1: Rate of return above earnings growth of 1.5 per cent Age Start Saving (£) Target weekly income (£) 20 years 30 years 40 years 50 10 15 25 100 25 35 45 200 50 65 95 300 75 100 140

Table 2: Rate of return above earnings growth of 2.5 per cent. Age Start Saving (£) Target weekly income (£) 20 years 30 years 40 years 50 10 15 20 100 20 25 40 200 40 55 80 300 60 80 120

§ Matthew TaylorTo ask the Secretary of State for Work and Pensions if he will estimate the cost of(a) an increase of £5 in the rate of the basic state pension and (b) the introduction of age additions of (i) £5 for pensioners aged 75 to 79 and (ii) £10 for pensioners aged 80 years or over, on the basis that the age additions for 265W those aged 75 to 79 or 80 years and over are paid in full, regardless of contribution record; and if he will make a statement. [90172]

§ Mr. McCartneyWe estimate that it would cost around £2.6 billion in 2003–04 to increase the maximum rate payable of the basic State pension by £5 per week and all other payments proportionately.

If weekly age additions of £5 were introduced for pensioners aged 75–79 and £10 for pensioners aged 80 years and over, we estimate that this would cost around £1.8 billion in 2003–04.

Notes:

1. Estimates are in cash terms for Great Britain and are rounded to the nearest £100 million.

2. Costs are gross, i.e. no account has been taken of offsetting savings in income related benefits.

§ Mr. WebbTo ask the Secretary of State for Work and Pensions pursuant to his answer of 9 January 2003, ref 88793, on pensions, if a UK citizen moves from a country where UK pensions are not uprated back to the UK and thence to another EU member state, whether they will be entitled to an annually uprated basic pension, and if this payment will be at the same rate as if they lived in the UK. [91299]

§ Mr. McCartneyIf a UK citizen who is entitled to receive a UK State Pension moves back to the UK from a country where UK pensions are not uprated and then moves to another EU member state, they will be entitled to an annually uprated State Pension in the EU member state that is paid at the same rate as if they lived in the UK.

§ Paul FlynnTo ask the Secretary of State for Work and Pensions what the estimated retirement income from the state in 2050 is, as a percentage of their earnings, for employees at the income levels shown in Figure 1.7 of the pensions Green Paper (Cm 5677), assuming that the state second pension remains earnings-related and that they are not contracted out; and what would be the corresponding figures if the basic state pension were increased in line with average earnings in 2004 and subsequent years. [89644]

§ Mr. McCartneyThe figures in Table 1 show the projected replacement rate provided by the state for individuals retiring in 2050. These figures correspond directly with those behind Figure 2.7 in the Green Paper Simplicity, security and choice: working and saving for retirement (Cm 5677).

Retirement income from the state includes the basic state pension, state second pension and pension credit. The hypothetical individuals are assumed to be contracted in to state second pension in all years. A full list of modelling assumptions is set out in Annex 5 of the Green Paper.

266W

Table 1: Retirement income from the State for those retiring in 2050, expressed as a percentage of earnings before retirement, assuming that the policy regime remains unchanged Weekly earnings (£) Replacement rates (per cent.) 100 139 200 69 300 48 400 37 500 30 600 25 Note:

All figures rounded to nearest 1 per cent.

Source:

Department for Work and Pensions calculations.

The projections in Table 2 have been made on exactly the same basis as those in Table 1 but for the uprating of the basic state pension by earnings as opposed to prices.

Table 2: Retirement income from the state for those retiring in 2050 as a percentage of earnings before retirement, assuming that the basic state pension is increased with earnings from 2004 Weekly earnings (£) Replacement rates (per cent.) 100 142 200 71 300 49 400 38 500 31 600 26 Note:

All figures rounded to nearest 1 per cent.

Source:

Department for Work and Pensions calculations.

In both sets of projections the start point of the savings credit element of pension credit is set at the value of the full basic state pension. For the projections in Table 2 this start point is of higher value because the basic state pension has been assumed to increase in line with earnings and not prices.

All figures are rounded to the nearest 1 per cent.; this degree of accuracy has been used in this question to indicate that the projections in Table 2 are slightly higher than those in Table 1 for all hypothetical individuals.