§ Mr. MeacherTo ask the Secretary of State for Social Security (1) pursuant to his statement on 27 November 1989,Official Report, column 525, on what basis he calculated that average incomes of pensioners had risen by about 23 per cent. since 1979; if he will set out the percentage increase in incomes of pensioners over this period from (i) the basic state pension, (ii) SERPS, (iii) occupational pension schemes (iv) dividends and interest and (v) other sources of income; if he will set out this information by deciles; and if he will indicate what weighting he gives to each of these sources of income in calculating the overall increase in pensioner incomes;
(2) if he will indicate the level of total incomes of each decade of pensioners, at constant prices, in 1979 and 1989, and the percentage increase in each case or whatever data most closely approximate to this;
(3) pursuant to his answer of 12 January, Official Report, column 782, what was the cumulative increase above inflation on the basic national insurance pension in the periods (a) 1974 to November 1979 and (b) November 1979 to April 1990;
(4) what has been the percentage increase in the total incomes in real terms of each income decile of pensioners
Table 1 Pensioners' incomes 1974 1979 1987 Real terms increase 1974–79 percent. Real terms increase 1979–87 percent. Total Social Security benefits 45.00 50.50 59.20 12 17 Occupational Pensions 11.80 13.20 23.30 12 77 Savings Income 10.70 9.10 20.90 -16 130 Earnings 13.60 9.90 7.90 -27 -20 Total Gross Income 81.10 82.80 111.20 2 34 Total Net Income 73.80 75.90 99.90 3 31 Notes:
- 1. Source: Family Expenditure Survey.
- 2. £s per week at 1987 prices.
The more detailed information sought about the breakdown of pensioners' incomes is not available in precisely the form requested, since (for example) the FES
Table 2 Percentage increase: Components of pensioners' income 1974–79 and 1979–87 RP and related benefits Other benefits Occupational pensions INV income Earnings Total net Decile 1974–79 1979–87 1974–79 1979–87 1974–79 1979–87 1974–79 1979–87 1974–79 1979–87 1974–79 1979–87 Lowest 19 19 -35 -42 -13 65 -3 119 25 -70 14 18 2 16 11 -29 51 -10 408 1 109 -82 125 12 20 3 13 21 -77 2 131 54 -3 71 -44 -1 10 23 4 9 23 157 -33 5 89 -24 64 -86 231 7 24 5 3 21 140 63 13 76 -11 36 -12 -51 5 24 6 5 18 138 54 3 85 10 37 -39 -36 5 24 7 17 9 100 250 -29 116 -17 52 -50 -42 4 25 8 1 12 81 42 16 71 -32 234 7 -44 4 27 9 10 6 7 116 35 56 -20 131 -25 -10 5 29 Highest 28 14 27 30 10 78 -16 152 -29 -17 -6 53 Overall 11 15 39 60 12 76 -16 131 -27 -21 3 31 Note:
690WThis table breaks down the available sample survey information into too detailed an analysis for the results to be statistically significant and it is not possible to draw meaningful conclusions from it.since 1979; and, in the case of each decile, what has been the real increase over the same period in income from (i) SERPS, (ii) occupational pension schemes, (iii) interest and dividends and (iv) other sources of income;
(5) what was the net income at 1986 prices of those pensioner tax units who obtained all their income from state benefits in each year since 1979; whether he will show separately the amount of income from (a) national insurance pension, (b) the amount in (a) represented by the state earnings-related pension, (c) supplementary benefit or income support, (d) housing benefit, (e) disability benefits and (f) other; and whether he will show data separately for single and married tax units.
§ Mrs. Gillian Shephard[holding answers 8 January, 22 January, 26 February 1990]: The figure of a 23 per cent. increase in pensioners' average total net incomes to which the hon. Member's question refers relates to the increase from 1979 to 1986, and has therefore now been superseded by the analysis drawn from the 1987 family expenditure survey which has recently become available, showing an increase of over 31 per cent. in such incomes between 1979 and 1987. The table is therefore based on this more up-to-date information, and gives figures for both 1974–79 and for 1979–87.
does not separately identify the basic state pension and the earnings-related SERPS element, but the table gives the available information broken down by deciles.
691W
Table 3 Pensioners' total net income at constant prices 1974, 1979 and 1987 1974 1979 1987 Increase percentage £ £ £ 1974–79 1979–87 Decile: Lowest 31.10 35.50 41.80 14 18 2 38.40 43.00 51.50 12 20 3 43.60 48.20 59.10 10 23 4 49.20 52.70 65.60 7 24 5 56.00 58.60 72.40 5 24 6 63.80 66.70 83.00 5 24 7 72.90 75.80 95.00 4 25 8 84.40 87.50 111.50 4 27 9 103.90 109.10 141.50 5 29 Highest 194.30 182.20 277.90 -6 53 Overall 73.80 75.90 99.90 3 31 Source: Family Expenditure Survey.
For similar reasons it is also not possible to give precisely the information requested about pensioner tax units wholly dependent upon state benefits, but the table gives the available information for the years 1979 to 1987.
Table 4 Incomes of pensioner tax units with all income in state benefits 1979 to 1987 Average total net income Retirement pension+ supplementary benefit/income supplement+ housing benefit Other benefits (including disability benefits) Single 1979 46.30 43.50 2.80 1980 47.80 45.40 2.40 1981 51.10 47.40 3.60 1982 53.50 50.70 2.80 1983 55.80 53.60 2.20 1984 57.10 53.50 3.60 1985 57.70 54.00 3.70 1986 57.00 53.60 3.40 1987 58.60 54.70 3.90 Married 1979 72.80 69.50 3.50 1980 71.70 68.50 3.20 1981 78.50 75.80 2.70 1982 79.70 73.90 5.80 1983 82.30 78.20 4.10 1984 87.90 80.20 7.70 1985 84.20 77.10 7.10 1986 90.50 78.50 12.00 1987 88.40 78.60 9.90 All 1979 50.60 47.70 2.90 1980 52.80 50.20 2.50 1981 56.00 52.60 3.50 1982 59.00 55.50 3.40 1983 61.10 58.50 2.50 1984 62.80 58.50 4.30 1985 62.10 57.80 4.20 1986 63.40 58.40 5.00 1987 64.40 59.30 5.00 Notes to tables 2, 3, and 4:
- 1. All cash figures are £ per week at 1987 prices.
- 2. All figures refer to pensioner tax units.
- 3. Retirement pension and related benefits includes basic retirement pension, additional pension, income support and housing benefit.
- 4. See note 5.
- 5. In common with all other surveys, the Family Expenditure Survey draws information from a random sample of the population. This means that the FES will occasionally include some individuals whose weekly income are considerably higher
692 or lower than those of the remainder of their group. The unrepresentative income of such individuals, when averaged, may give wide swings in year-to-year comparisons. In general, when viewed over the longer term, the data provides a more reliable overall indication of the movement in average weekly incomes. We are considering whether the use of decile medians for tables involving deciles would enhance their statistical reliability. Comparisons of changes in the basic national insurance pension over the periods requested, and between those periods, are complicated by a number of changes in uprating requirements and dates, including both those mentioned in my reply to the hon. Member on 20 December 1989 at column 299-302 and the earlier change, in 1976, from uprating based on known movements in indices of prices-earnings to uprating based on forecasts. This change had the practical effect that the change in prices or earnings over the period March 1975 to November 1975 was never taken into account for any uprating.
The table therefore gives the figures requested on the same basis as in my reply of 20 December 1989, giving comparisons both for November 1978 and for November 1979 (when long-term benefit rates were increased by 2 per cent. more than inflation to make up for an under-forecast in 1978), and for changes in the average real value of benefits in the relevant uprating periods as a whole. Figures for April 1990, and therefore for the uprating year April 1989–90, are not yet available.
Table 5 Per cent. Uprating dates July 1974-November 1978 5.6 November 1978-April 1989 0.4 July 1974-November 1979 7.5 November 1979-April 1989 -1.4 Uprating periods (average value) July 1974-April 1975—November 1978-November 1979 3.9 November 1978.79-April 1988.89 7.1