Pensioners' Incomes (Hansard, 18 June 1990)

§ Mr. Meacher
To ask the Secretary of State for Social Security (1) if, further to his reply of 4 April,Official Report, columns 689–90, he will (a) provide a breakdown of tables 1 and 2 differentiating SERPS as a separate source of income, (b) indicate what is covered in table 2 by related benefits and other benefits, (c) state the average annual percentage increase implied in the last two columns of tables 1, 2 and 3 and (d) provide whatever similar information is available for 1988–89;
(2) if he will set out the actual incomes in pounds sterling and pence which underlie his answer to the hon. Member for Oldham, West (Mr. Meacher) on 4 April, Official Report, columns 689–90, table 2, which lists the percentage increase in components of pensioners' income from 1974 to 1979 and 1979 to 1987; what is the source of

Table 3

Components of pensioners' income by decile 1974 at 1987 prices

Decile RP. Supplementary Benefit and Housing Benefit Other SS benefits Occupational pensions Investment income Earnings Tax and National Insurance Total net

Lowest 27.81 1.56 0.31 0.94 0.64 0.12 31.14

2 34.52 1.19 0.63 1.66 0.60 0.16 38.44

3 38.56 1.61 0.95 2.07 0.67 0.24 43.61

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each of these items of data; and if he will list exactly which benefits are covered by RP and related benefits and other benefits;
(3) what are the actual income levels on which table 2 is based in his answer on 4 April, Official Report, columns 689–90, regarding the percentage increase in the components of pensioners' incomes in 1974, 1979 and 1987.

§ Mrs. Gillian Shephard
[holding answers 23 April and 6 June 1990]: The source for the figures used in this and the previous reply is the family expenditure survey. The information on SERPS is not available; it is not separately identified from state retirement pension in the source data. Information is not available beyond the latest available family expenditure survey data of 1987.
The term "RP and related benefits" in table 2 refers to the state retirement pension, supplementary benefit and housing benefit. The term "Other benefits" refers to all other social security benefits than those listed above.
The annual average percentages implied in the last two columns of table 1 of the reply given to the hon. Member on 4 April, Official Report, columns 689–90, are set out in table 1; the same figures in respect of tables 2 and 3 are set out in table 2.
The figures requested, which underlie the percentage movements at table 2, are set out in tables 3, 4 and 5.

Table 1

Pensioners' Incomes: 1974, 1979 and 1987—Percentage Increase and Average Annual Increase

Pensioners' Income Real increase 1974–79 per cent. Annual rate per cent. Real increase 1979–87 per cent. Annual rate per cent.

Total Social Security Benefits 12 1.5 17 2.0

Occupational Pensions 12 1.5 77 7.3

Savings Income -16 -2.2 130 11.0

Earnings -27 -3.8 -20 -2.9

Total Gross Income 2 0.3 34 3.8

Total Net Income 3 0.4 31 3.5

Table 2

Pensioners total net incomes: Percentage increases 1974–79 and 1979–87

Decile Increase 1974–79 per cent. Annual rate of increase per cent. Increase 1979–87 per cent. Annual rate of increase per cent.

Lowest 14 2.7 18 2.1

2 12 2.3 20 2.3

3 10 2.0 23 2.6

4 7 1.4 24 2.8

5 5 0.9 24 2.7

6 5 0.9 24 2.8

7 4 0.8 25 2.9

8 4 0.7 27 3.1

9 5 1.0 29 3.3

Highest -6 -1.3 53 5.4

Overall 3 0.6 31 3.5

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Decile RP, Supplementary Benefit and Housing Benefit Other SS benefits Occupational pensions Investment income Earnings Tax and National Insurance Total net

4 41.45 1.02 2.66 3.35 1.25 0.56 49.18

5 45.93 0.89 4.32 3.84 2.68 1.64 56.03

6 48.58 1.20 6.45 5.03 4.28 1.75 63.79

7 50.37 1.09 10.83 7.15 6.97 3.47 72.94

8 54.95 3.23 13.50 7.54 9.76 4.61 84.38

9 50.05 3.35 22.59 14.53 26.00 12.60 103.93

Highest 39.08 3.34 55.55 61.65 83.11 48.41 194.33

Overall 43.13 1.83 11.77 10.77 13.59 7.35 73.76

Table 4

Components of pensioners' income by decile 1979 at 1987 prices

Decile Retirement pension, supplementary benefit and housing benefit Other statutory state benefits Occupational pensions Investment income Earnings Tax and National Insurance Total net

Lowest 33.02 1.02 0.27 0.91 0.80 0.51 35.50

2 40.07 0.85 0.56 1.67 0.11 0.25 43.01

3 43.66 0.37 2.19 2.01 0.37 0.44 48.17

4 45.07 2.63 2.80 2.56 0.18 0.50 52.74

5 47.17 2.14 4.87 3.43 2.36 1.39 58.60

6 51.23 2.85 6.65 5.56 2.62 2.19 66.72

7 58.85 2.17 7.69 5.92 3.49 2.33 75.79

8 55.34 5.85 15.71 5.12 10.45 4.96 87.51

9 55.23 3.59 30.43 11.70 19.54 11.39 109.10

Highest 50.08 4.25 61.30 51.60 59.41 44.47 182.17

Overall 47.97 2.57 13.24 9.04 9.93 6.84 75.92

Table 5

Components of pensioners' income by decile 1987 at 1987 prices

Decile Retirement pension, supplementary benefit and housing benefit Other statutory state benefits Occupational pensions Investment income Earnings Tax and National Insurance Total net

Lowest 39.20 0.59 0.45 1.98 0.24 0.64 41.82

2 44.54 1.29 2.87 3.49 0.25 0.93 51.51

3 52.79 0.38 3.36 3.45 0.37 1.28 59.07

4 55.24 1.76 5.31 4.20 0.59 1.54 65.55

5 56.85 3.49 8.58 4.67 1.17 2.36 72.40

6 60.37 4.39 12.28 7.59 1.69 3.35 82.96

7 64.08 7.61 16.59 8.98 2.03 4.29 95.01

8 62.17 8.34 26.80 17.11 5.81 8.78 111.45

9 58.67 7.75 47.50 27.05 17.53 17.22 141.28

Highest 56.99 5.52 109.14 130.16 49.07 72.99 277.88

Overall 55.09 4.11 23.28 20.86 7.87 11.33 99.88

Note:
All tables source: Family Expenditure Survey.

§ Mr. Meacher
To ask the Secretary of State for Social Security. pursuant to his answer of 4 April,Official Report, columns 687–92, what information is available on the contribution of state earnings-related pension to the real rise in pensioner incomes since 1979.

§ Mrs. Gillian Shephard
[holding answer 17 May 1990]: Information is not available in the family expenditure survey on the state earnings-related pension scheme.
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However, data from the Department's biannual statistical inquiry of retirement pension and widows benefit¹ shows that between 1979 and 1987 the average amount² of net additional component in payment rose from £0.65 to £2.71³.
Figures from the family expenditure survey show that pensioners' average net incomes rose from £75.90 in 1979 to £99.90³ in 1987.
¹Copy available in the Library.
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²Average is for those pensioners receiving an additional pension.
³All amounts are £s per week at 1987 prices.

Table 3
Components of pensioners' income by decile 1974 at 1987 prices
Decile	RP. Supplementary Benefit and Housing Benefit	Other SS benefits	Occupational pensions	Investment income	Earnings	Tax and National Insurance	Total net
Lowest	27.81	1.56	0.31	0.94	0.64	0.12	31.14
2	34.52	1.19	0.63	1.66	0.60	0.16	38.44
3	38.56	1.61	0.95	2.07	0.67	0.24	43.61

Table 1
Pensioners' Incomes: 1974, 1979 and 1987—Percentage Increase and Average Annual Increase
Pensioners' Income	Real increase 1974–79 per cent.	Annual rate per cent.	Real increase 1979–87 per cent.	Annual rate per cent.
Total Social Security Benefits	12	1.5	17	2.0
Occupational Pensions	12	1.5	77	7.3
Savings Income	-16	-2.2	130	11.0
Earnings	-27	-3.8	-20	-2.9
Total Gross Income	2	0.3	34	3.8
Total Net Income	3	0.4	31	3.5

Table 2
Pensioners total net incomes: Percentage increases 1974–79 and 1979–87
Decile	Increase 1974–79 per cent.	Annual rate of increase per cent.	Increase 1979–87 per cent.	Annual rate of increase per cent.
Lowest	14	2.7	18	2.1
2	12	2.3	20	2.3
3	10	2.0	23	2.6
4	7	1.4	24	2.8
5	5	0.9	24	2.7
6	5	0.9	24	2.8
7	4	0.8	25	2.9
8	4	0.7	27	3.1
9	5	1.0	29	3.3
Highest	-6	-1.3	53	5.4
Overall	3	0.6	31	3.5

Decile	RP, Supplementary Benefit and Housing Benefit	Other SS benefits	Occupational pensions	Investment income	Earnings	Tax and National Insurance	Total net
4	41.45	1.02	2.66	3.35	1.25	0.56	49.18
5	45.93	0.89	4.32	3.84	2.68	1.64	56.03
6	48.58	1.20	6.45	5.03	4.28	1.75	63.79
7	50.37	1.09	10.83	7.15	6.97	3.47	72.94
8	54.95	3.23	13.50	7.54	9.76	4.61	84.38
9	50.05	3.35	22.59	14.53	26.00	12.60	103.93
Highest	39.08	3.34	55.55	61.65	83.11	48.41	194.33
Overall	43.13	1.83	11.77	10.77	13.59	7.35	73.76

Table 4
Components of pensioners' income by decile 1979 at 1987 prices
Decile	Retirement pension, supplementary benefit and housing benefit	Other statutory state benefits	Occupational pensions	Investment income	Earnings	Tax and National Insurance	Total net
Lowest	33.02	1.02	0.27	0.91	0.80	0.51	35.50
2	40.07	0.85	0.56	1.67	0.11	0.25	43.01
3	43.66	0.37	2.19	2.01	0.37	0.44	48.17
4	45.07	2.63	2.80	2.56	0.18	0.50	52.74
5	47.17	2.14	4.87	3.43	2.36	1.39	58.60
6	51.23	2.85	6.65	5.56	2.62	2.19	66.72
7	58.85	2.17	7.69	5.92	3.49	2.33	75.79
8	55.34	5.85	15.71	5.12	10.45	4.96	87.51
9	55.23	3.59	30.43	11.70	19.54	11.39	109.10
Highest	50.08	4.25	61.30	51.60	59.41	44.47	182.17
Overall	47.97	2.57	13.24	9.04	9.93	6.84	75.92

Table 5
Components of pensioners' income by decile 1987 at 1987 prices
Decile	Retirement pension, supplementary benefit and housing benefit	Other statutory state benefits	Occupational pensions	Investment income	Earnings	Tax and National Insurance	Total net
Lowest	39.20	0.59	0.45	1.98	0.24	0.64	41.82
2	44.54	1.29	2.87	3.49	0.25	0.93	51.51
3	52.79	0.38	3.36	3.45	0.37	1.28	59.07
4	55.24	1.76	5.31	4.20	0.59	1.54	65.55
5	56.85	3.49	8.58	4.67	1.17	2.36	72.40
6	60.37	4.39	12.28	7.59	1.69	3.35	82.96
7	64.08	7.61	16.59	8.98	2.03	4.29	95.01
8	62.17	8.34	26.80	17.11	5.81	8.78	111.45
9	58.67	7.75	47.50	27.05	17.53	17.22	141.28
Highest	56.99	5.52	109.14	130.16	49.07	72.99	277.88
Overall	55.09	4.11	23.28	20.86	7.87	11.33	99.88