§ Mr. RedwoodTo ask the Secretary of State for Social Security what would be the additional cost to public funds in cash terms in 1996–97 of the basic retirement pension, if pensions had been indexed to wages for the last 25 years. [37578]
§ Mr. HealdThe additional cost to public funds if the basic pension had been uprated by average earnings over the last 25 years is estimated to be £5.2 billion per annum in 1996–97 (cash prices).
Notes:1. The additional cost is net of the effect on income-related benefits.2. The cost is calculated on a basic state pension in 1996–97 being:
- Cat A: £76.10
- Cat BL: £47.70
Source:Average earnings index (whole economy, all earnings, unadjusted). The Abstract of Statistics for Social Security Benefits and Contributions and Indices of Prices and Earnings. Uprating rounding convention has been followed in calculating benefit rates.The estimate is based on the expenditure figures shown in the departmental report, Cm 3213, for basic retirement pensions. It does not include the effect on those benefits normally paid at the same rate as basic retirement pension or other benefits paid to people over pension age.
§ Ms CorstonTo ask the Secretary of State for Social Security what is the Government Actuary's estimate of the average lump sum investment required in an annuity to provide a personal pension equivalent to the basic retirement pension at 65 years for people aged 25, 35, 45 and 55 years today, assuming that the pension is related(a) only to prices and (b) to earnings at 1.5 per cent. per annum. [38541]
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Table 1: Cash prices Male average earnings ½ male average earnings Year of retirement (i.e. year of reaching State pension age) Basic retirement pension (RP) (£ per week) As a percentage of pre-retirement earnings Additional pension (AP) (£ per week) As a percentage of pre-retirement earnings Basic retirement pension (RP) (£ per week) As a percentage of pre-retirement earnings Additional pension (AP) (£ per week) As a percentage of pre-retirement earnings 1996 61.15 16 77.40 20 61.15 32 32.20 17 1997 64.20 16 83.40 21 64.20 32 34.50 17 1998 67.40 16 91.20 21 67.40 32 37.60 18 1999 70.80 16 96.80 21 70.80 31 40.00 18 2000 74.35 15 99.90 21 74.35 31 40.10 17 2001 78.05 15 105.30 21 78.05 30 42.30 16 2002 81.95 15 110.90 20 81.95 30 44.60 16 2003 86.05 15 116.70 20 86.05 30 47.00 16 2004 90.35 15 122.70 20 90.35 29 49.50 16 2005 94.85 14 128.90 19 94.85 29 52.10 16 2006 99.60 14 135.40 19 99.60 28 54.80 16 2007 104.60 14 142.00 19 104.60 28 57.50 15 2008 109.80 14 148.80 19 109.80 27 60.40 15 2009 115.30 14 155.70 18 115.30 27 63.40 15 2010 121.05 13 165.40 18 121.05 27 67.60 15 2011 127.15 13 175.70 18 127.15 26 72.00 15 2012 133.50 13 186.60 18 133.50 26 76.80 15 2013 140.15 13 198.10 18 140.15 25 81.90 15 2014 147.15 13 210.40 18 147.15 25 87.40 15
§ Mr. HealdThe information is in the table.
Estimated lump sum investment required in an annuity to provide a personal pension equivalent to the basic retirement pension at 65 years £ (a) Prices (b) Earnings at 1.5 per cent. Age Men Women Men Women 25 13,000 15,500 27,000 32,500 35 17,500 20,500 31,000 37,500 45 23,500 27,500 35,500 43,000 55 31,000 37,000 41,000 49,500 Source:
Government Actuary's Department.
Notes:
1. The table indicates the estimated lump sum payments if:
Column (a): the current basic retirement pension for a single person of £61.15 per week were to be increased in future in line with the retail prices index; or
Column (b): the current basic retirement pension for a single person of £61.15 per week were to be increased in future in line with the index of national average earnings, which has been assumed to increase by 1.5 per cent. per annum over the increase in the retail prices index.
2. The assumptions underlying these estimates are consistent with those adopted for the purpose of the Government Actuary's March 1996 review of the National Insurance rebates for persons contracted-out of the State Earnings-Related Pension Scheme through Appropriate Personal Pension Schemes for the five year period commencing on 6 April 1997 (Cm 3221).
§ Mr. FlynnTo ask the Secretary of State for Social Security what is his estimate of the weekly state basic and earnings-related pensions payable to men and women on average earnings and half average earnings reaching pension age in each year from 1996 to 2040, in cash terms and as a percentage of their pre-retirement earnings. [37884]
§ Mr. Heald[holding answer 22 July 1996]: The information is set out in the tables.
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Table 1: Cash prices Male average earnings ½ male average earnings Year of retirement (i.e. year of reaching State pension age) Basic retirement pension (RP)(£ per week) As a percentage of pre-retirement earnings Additional pension (AP) (£ per week) As a percentage of pre-retirement earnings Basic retirement pension (RP)(£ per week) As a percentage of pre-retirement earnings Additional pension (AP) (£ per week) As a percentage of pre-retirement earnings 2015 154.50 12 223.30 18 154.50 25 93.20 15 2016 162.25 12 237.00 18 162.25 24 99.40 15 2017 170.35 12 251.50 18 170.35 24 106.00 15 2018 178.90 12 266.80 18 178.90 24 113.10 15 2019 187.80 12 283.10 18 187.80 23 120.70 15 2020 197.20 11 300.30 17 197.20 23 128.80 15 2021 207.10 11 318.60 17 207.10 23 137.40 15 2022 217.45 11 337.90 17 217.45 22 146.60 15 2023 228.30 11 358.40 17 228.30 22 156.40 15 2024 239.70 11 380.10 17 239.70 22 166.90 15 2025 251.70 11 403.10 17 251.70 21 178.10 15 2026 264.30 10 427.80 17 264.30 21 190.10 15 2027 277.50 10 453.30 17 277.50 21 202.90 15 2028 291.40 10 478.00 17 291.40 20 216.10 15 2029 305.95 10 503.10 16 305.95 20 229.80 15 2030 321.25 10 529.20 16 321.25 20 244.40 15 2031 337.30 10 557.80 16 337.30 19 260.50 15 2032 354.15 10 587.90 16 354.15 19 277.80 15 2033 371.90 9 619.70 16 371.90 19 296.40 15 2034 390.45 9 653.10 16 390.45 19 316.30 15 2035 410.00 9 687.80 15 410.00 18 337.30 15 2036 430.50 9 724.20 15 430.50 18 359.80 15 2037 452.00 9 761.50 15 452.00 18 383.40 15 2038 474.60 9 804.80 15 474.60 18 410.20 15 2039 498.35 9 850.30 15 498.35 17 438.90 15 2040 523.25 9 897.60 15 523.25 17 469.30 15
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Table 2: Cash prices Female average earnings ½ female average earnings Year of retirement (i.e. year of reaching State pension age) Basic retirement pension (RP)(£ per week) As a percentage of pre-retirement earnings Additional pension (AP) (£ per week) As a percentage of pre-retirement earnings Basic retirement pension (RP) (£ per week) As a percentage of pre-retirement earnings Additional pension (AP) (£ per week) As a percentage of pre-retirement earnings 1996 61.15 22 47.70 17 61.15 44 17.30 13 1997 64.20 22 51.50 18 64.20 45 18.50 13 1998 67.40 22 56.50 18 67.40 44 20.20 13 1999 70.80 22 60.30 18 70.80 43 21.80 13 2000 74.35 21 61.60 18 74.35 43 20.90 12 2001 78.05 21 65.20 18 78.05 42 22.20 12 2002 81.95 21 68.80 17 81.95 42 23.60 12 2003 86.05 20 72.60 17 86.05 41 25.00 12 2004 90.35 20 76.60 17 90.35 40 26.40 12 2005 94.85 20 80.60 17 94.85 40 27.90 12 2006 99.60 20 84.90 17 99.60 39 29.50 12 2007 104.60 19 89.20 16 104.60 39 31.10 11 2008 109.80 19 93.70 16 109.80 38 32.80 11 2009 115.30 19 98.40 16 115.30 37 34.50 11 2010 121.05 18 105.00 16 121.05 37 37.00 11 2011 127.15 18 112.00 16 127.15 36 39.60 11 2012 133.50 18 119.50 16 133.50 36 42.40 11 2013 140.15 18 127.50 16 140.15 35 45.40 11 2014 147.15 17 136.00 16 147.15 35 48.60 11 2015 154.50 17 145.10 16 154.50 34 52.10 11 2016 162.25 17 154.80 16 162.25 34 55.80 12 2017 170.35 17 165.20 16 170.35 33 59.70 12 2018 178.90 16 176.30 16 178.90 33 63.90 12 2019 187.80 16 188.10 16 187.80 32 68.40 12 2020 197.20 16 200.70 16 197.20 32 73.20 12 2021 207.10 16 214.20 16 207.10 31 78.40 12 2022 217.45 15 228.50 16 217.45 31 83.90 12 2023 228.30 15 243.80 16 228.30 30 89.80 12 2024 239.70 15 260.20 16 239.70 30 96.10 12 2025 251.70 15 277.60 16 251.70 30 102.90 12 2026 264.30 15 296.30 16 264.30 29 110.10 12
Table 2: Cash prices Female average earnings ½ female average earnings Year of retirement (i.e. year of reaching State pension age) Basic retirement pension (RP) (£ per week) As a percentage of pre-retirement earnings Additional pension (AP) (£ per week) As a percentage of pre-retirement earnings Basic retirement pension (RP) (£ per week) As a percentage of pre-retirement earnings Additional pension (AP) (£ per week) As a percentage of pre-retirement earnings 2027 277.50 14 316.10 16 277.50 29 117.80 12 2028 291.40 14 337.40 16 291.40 28 126.70 12 2029 305.95 14 359.60 16 305.95 28 136.00 12 2030 321.25 14 382.90 16 321.25 27 145.70 12 2031 337.30 14 408.20 16 337.30 27 156.60 13 2032 354.15 13 435.20 16 354.15 27 168.30 13 2033 371.90 13 463.80 16 371.90 26 180.80 13 2034 390.45 13 494.20 16 390.45 26 194.40 13 2035 410.00 13 526.10 16 410.00 25 208.70 13 2036 430.50 13 560.00 16 430.50 25 224.10 13 2037 452.00 12 595.20 16 452.00 25 240.20 13 2038 474.60 12 634.90 16 474.60 24 258.20 13 2039 498.35 12 676.80 16 498.35 24 277.30 13 2040 523.25 12 720.70 16 523.25 24 297.60 13 1. All amounts are in cash prices. Amounts of AP are rounded to the nearest l0p, amounts of RP are rounded to the nearest 5p and percentages are rounded to the nearest whole number.
2. Average earnings figures are taken from New Earnings Survey 1995.
3. The above estimates are prepared by the Government Actuary's Department (GAD) using the following assumptions:Treasury forecast was used for the current year. Thereafter GAD have used an illustrative assumption of 5 per cent. per annum.Earnings rise by 1.5 per cent. higher than prices.Individuals are contracted in to the State Earnings Related Pension Scheme throughout.Pre-retirement earnings are taken as estimated earnings in the year prior to retirement.Changes introduced in the Pensions Act 1995 have been taken into account.