§ Baroness Hollis of Heighamasked Her Majesty's Government:
How (including the assumptions made) the figure given by the Lord Mackay of Ardbrecknish during the Report stage of the Pensions Bill of £20 million net reduction in income related benefits if pensions could be split after divorce was calculated (H.L. Deb., 14 March 1995, col. 747); and how the savings are distributed on a yearly basis up to 2020.
§ Lord Mackay of ArdbrecknishEstimates of the savings incurred were revisited for the House of Commons Committee stage of the Pensions Bill; it is now estimated that the net reduction in income related benefits if pensions could be split after divorce would be £70 million per year in 2025. This figure is based on estimates provided by the Government Actuary's department of the number of people who will have divorced after 1996, by sex, current age and age at the time of divorce.
In making this estimate it has been assumed that half of the average difference between a husband and wife's occupational pension accrued up to the time of divorce will be transferred from the husband to the wife in all divorces that involve occupational pension rights. For every £1 transferred from husband to wife, approximately £0.30 is likely to be saved from income related benefits.
Estimates of how savings are distributed on a yearly basis up to 2020 are not available.