§ Mr. Willetts
To ask the Secretary of State for Work and Pensions (1) with reference to Figure A3.1 on page 148 of the Pensions Green Paper (Cm 5677), what the assumed number of people receiving contracted-out rebates is in(a) 2001–02, (b) 2011–12, (c) 2021–22, (d) 2031–32, (e) 2041–42 and (f) 2051–52; 
(2) with reference to Figure A3.1 on page 148 of the Pensions Green Paper (Cm 5677), what the projected level of expenditure is (a) as a percentage of GDP and (b) in 2003 prices on contracted-out rebates in (i) 2001–02, (ii) 2011–12, (iii) 2021–22, (iv) 2031–32, (v) 2041–42 and (vi) 2051–52. 
§ Malcolm Wicks
The available information is in Tables 1–3.
Figure A3.1 on page 148 of Simplicity, Security and Choice (Cm 5677), shows projected future expenditure on state benefits to people over state pensions age, including state Second Pension. The tables set out assumptions on the levels of contracting-out over time which underpinned Figure A3.1.
There have already been many changes to the contracting-out regime since the date of the last available data. The Green Paper therefore makes it clear that these assumptions should be interpreted with532W
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considerable care because of the uncertainties surrounding the assumptions used. Projecting over such a long period can be significantly affected by even minor changes in the assumptions used.
Table 1: Assumed number of people receiving contracted-out rebates GB-billion Number 2001–02 13.0 2011–12 12.0 2021–22 10.7 2031–32 9.2 2041–42 8.9 2051–52 8.8
Table 2: Assumed expenditure of providing contracted-out rebates GB-billion Number 2001–02 9.5 2011–12 11.4 2021–22 11.4 2031–32 10.4 2041–12 10.6 2051–52 11.6
Table 3: Assumed expenditure as a percentage of GDP GB Percentage 2001–02 0.9 2011–12 0.9 2021–22 0.7 2031–32 0.5 2041–12 0.4 2051–52 0.3
- (a) The figures shown in Table 1 were used as a basis for the Green Paper and are based only on the assumed number of people contracted out, and earning above the Lower Earnings Limit, and hence eligible for a rebate.
- (b) They show the average number of people contracted out at any point in the year, rather than the total number of people who have been contracted out some time during the year.
- (c) Figures are shown in constant 2002–03 price terms, except the figure for 2001–02 which has not been adjusted.
- (d) The projected rebate expenditure for 2011–12 reflects the sharp rise in the cost of rebates between the 2001–02 and 2002–03 tax years. This was due to the introduction of the State Second Pension which resulted in a large increase in the amount of rebates paid to Appropriate Personal Pensions.
- (e) The figures reflect the analysis of long term economic and demographic developments in the governments long term public finance report presented in November 2002.
Government Actuary's Department