§ Mr. Hal Millerasked the Secretary of State for Social Services what proportion of the pension of an individual who began drawing a full state retirement pension on 1st April 1977 after making the necessary contributions, would be covered by the contributions on (a) the present pay-as-you-go basis and (b) assuming interest accruing at the same rate as for a first-class life office.
§ Mr. Deakins,pursuant to his reply [Official Report, 27th June 1977; Vol. 934, c. 82–3], gave the following information:
A person continuously engaged in contracted out Class 1 employment, and earning sufficient to pay the maximum national insurance contribution, would have paid, between 5th July 1948 and 1st April 1977 a total of £1,546 in contributions. Assuming that the contributions had, over the same period, been invested at an interest rate of 5 per cent. a year, the sum would have increased to £2,320 by April 1977. The latter sum is approximately equivalent to a weekly payment to a 65-year-old man of £3.90 increased in line with the 297W future movement of earnings or prices, whichever is the greater. The currently weekly rate of retirement pension, including graduated benefit, such a man would receive is £25.75 a week if married or £16.55 if single. The Government are statutorily committed to increasing flat-rate benefits in line with the movement of earnings or prices, whichever is the greater, and from November the man would receive £29.25 a week if married or £18.75 if single.