§ Lord Oakeshott of Séagrove Bayasked Her Majesty's Government:
Further to the Written Answer by the Baroness Hollis of Heigham on 20 October (WA 153), what assumptions were made for the future rates of increase of (a) average earnings; and (b) the minimum income levels underwritten by pension credits. [HL5069]
§ The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Hollis of Heigham)The assumptions used were that the basic state pension was increased by 2.5 per cent in the years up to April 2005. In April 2006, the basic state pension was assumed to be uprated by £7 for a single person and £11 for a couple.
After April 2006, the basic state pension was assumed to increase annually in line with average earnings. Medium and long-term projections of average earnings are as published in the 2003 Budget and forecast real earnings growth at 2 per cent.
In modelling the pension credit, the guarantee credit has been uprated by earnings whilst the savings credit threshold has been uprated in line with the basic state pension.
However, the earlier answer should have said that the figures provided take account of the £11 increase for a couple.