§ Mr. DenhamTo ask the Secretary of State for Social Security, pursuant to his answer of 13 January, Official Report, columns153–54, what estimates he has made of gross pensioner income in 1996 prices in (a) 1994, (b) 2010 and (c) 2025; (i) by quintile and (ii) decile, indicating in each case the composition of income by source. [13233]
§ Mr. Heald[holding answer 29 January 1997]: Information is not available in the format requested. The pensioners' incomes series 1994–95 has been used to provide estimates of gross income, and its components, by quintile of the single and couple pensioner populations in 1994–95, at July 1994 prices. Estimates are given in tables 1 and 2.
The pensioners' incomes series 1994–95 is largely based on data drawn from the 1994–95 family expenditure survey, which does not contain information concerning the work histories of individuals, and is therefore not a good base upon which to forecast future levels of pensioners' incomes. Estimates of gross income, and its components, by quintile of the single and couple pensioner populations in 2010 and 2025 at 1994 prices have been made using PENSIM, a dynamic simulation model that projects pensioners' incomes into the next century, and are shown in tables 5 to 8.
However, for a number of reasons, the pensioners incomes series 1994–95 and PENSIM estimates are not directly comparable—they are necessarily based on different data sources, and have been calculated using methodologies that differ in a number of respects. While the pensioners' incomes series provides a good guide to historic absolute levels of pensioners' incomes, and their components, PENSIM has been designed to forecast
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§ Mr. Andrew MitchellThe information is not available in the format requested. Such information as is available in relation to retirement pension, attendance allowance and income support for pensioners is set out in the table:
long-term trends in pensioners' incomes, rather than precise amounts. In order to highlight these trends over time, tables 2 and 3 show PENSIM estimates of gross income, and its components, by quintile of the single and couple pensioner populations in 1994, at 1994 prices.
Tables 5 to 8 also show estimates of net income, and the percentage growth—to the nearest 5 per cent.—in net income from 1994. This information effectively supersedes that information given in my written answer to the hon. Member on Monday 13 January, Official Report, columns 153–54, which contained some figures which were calculated for 2020, but were described as estimates for 2010.
PENSIM estimates are based on a number of economic and behavioural assumptions. Due to the reliance on assumptions and the time period covered, estimates should be treated with caution, and have been rounded to the nearest £1. Reliable estimates of gross income by decile are not available from PENSIM or the pensioners' income series 1994–95, due to the size of the data samples used. The Department is aware of the limitations of the current PENSIM model. Most of these are due to the age and internal consistency of the relatively small data set used, which is based on three different surveys. It is intended to use larger data sets, including the lifetime labour market data base, to improve the robustness and modelling capability of PENSIM in the future.
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Table 1: Mean gross income and its components by quintile, single pensioners 1994–95 (July 1994 Prices)—The pensioners' incomes series 1994–95 Q1 Q2 Q3 Q4 Q5 Mean Benefit income 65.40 75.50 87.60 93.60 89.80 82.40 Occupational pensions 3.00 8.10 12.00 25.50 94.50 28.60 Investment income 4.00 5.10 5.50 11.20 84.10 21.90 Earnings 0.20 0.50 0.50 2.30 41.20 8.90 Other income 0.30 0.40 0.60 1.10 2.10 0.90 Gross income 72.90 89.70 106.20 133.80 311.60 142.70
Table 2: Mean gross income and its components by quintile, pensioner couples 1994–95 (July 1994 Prices)—The pensioners' incomes series 1994–95 Ql Q2 Q3 Q4 Q5 Mean Benefit income 108.80 120.00 126.90 125.00 116.00 119.30 Occupational pensions 8.00 22.60 44.60 89.20 219.00 76.70 Investment income 5.10 9.60 15.00 31.30 128.80 37.90 Earnings 0.60 4.70 5.50 13.20 77.80 20.30 Other income 0.80 0.30 3.10 1.00 3.00 1.60 Gross income 123.30 157.20 195.10 259.70 544.60 255.90 Notes:
1. All figures rounded to the nearest £0.10. Components may not sum to totals due to rounding.
2. Income refers to gross income before housing costs (BHC).
3. The quintiles have been constructed based on the equivalised BHC net income distribution. This is consistent with table 5 of the PI Series.
4. Pensioner units are defined as single people aged at state pension age or above, or couples in which the man is aged at state pension age or above.
Table 3: Mean gross income and its components by quintile, single pensioners 1994—PENSIM Estimates (1994 Prices) Ql £ Q2 £ Q3 £ Q4 £ Q5 £ Mean £ Benefit income 51 65 73 82 70 68 Occupational pensions 1 4 9 16 61 18 Investment income 4 3 5 7 57 15 Earnings * * * * 11 2 Other income * * * * 3 1 Gross income 57 72 87 105 201 104 Net income 57 72 86 102 171 98
Table 4: Mean gross income and its components by quintile, pensioner couples 1994—PENSIM estimates (1994 prices) Ql £ Q2 £ Q3 £ Q4 £ Q5 £ Mean £ Benefit income 103 116 117 120 117 114 Occupational pensions 6 16 35 57 92 41 Investment income 6 6 20 47 136 44 Earnings * * 2 8 84 19 Other income * * * 1 5 1 Gross income 115 142 175 232 434 220 Net income 115 142 173 222 369 204
Table 5: Mean gross income and its components by quintile, single pensioners 2010—PENSIM estimates (1994 prices) Ql Q2 Q3 Q4 Q5 Mean Benefit income £48 £69 £78 £88 £89 £74 Occupational pensions £2 £5 £11 £24 £62 £21 Investment income £5 £5 £8 £18 £100 £27 Earnings * * * * £20 £4 Other income * * * * £1 * Gross income £55 £79 £96 £129 £271 £126 Net income £55 £78 £94 £118 £221 £113 Percentage growth in net income from 1994 -5 10 10 15 30 15 346W347W
Table 6: Mean gross income and its components by quintile, pensioner couples 2010—PENSIM estimates (1994 prices) Ql Q2 Q3 Q4 Q5 Mean Benefit income £106 £124 £136 £144 £147 £132 Occupational pensions £6 £17 £35 £71 £109 £48 Investment income £6 £11 £22 £38 £172 £50 Earnings * * £7 £100 £22 Other income * * * * £2 * Gross income £118 £153 £193 £261 £530 £251 Net income £118 £153 £190 £245 £434 £228 Percentage growth in net income from 1994 5 5 10 10 20 10
Table 7: Mean gross income and its components by quintile, single pensioners 2025—PENSIM estimates (1994 prices) Ql 22 03 Q4 Q5 Mean Benefit income £56 £82 £93 £100 £93 £85 Occupational pensions £3 £6 £15 £37 £104 £33 Investment income £5 £6 £15 £38 £216 £56 Earnings * * * £32 £7 Other income * * * * * * Gross income £64 £95 £123 £175 £446 £181 Net income £64 £94 £115 £153 £342 £154 Percentage growth in net income from 1994 15 30 35 50 100 55
Table 8: Mean gross income and its components by quintile, pensioner couples 2025—PENSIM estimates (1994 prices) Ql Q2 Q3 Q4 Q5 Mean Benefit income £124 £147 £157 £150 £148 £145 Occupational pensions £11 £30 £64 £110 £136 £70 Investment income £10 £27 £48 £103 £338 £105 Earnings * * £3 £23 £149 £35 Other income * * * * * * Gross income £146 £205 £272 £385 £771 £356 Net income — £146 £201 £256 £337 £602 £309 Percentage growth in net income from 1994 25 40 50 50 65 50 1. All figures rounded to the nearest £5 per cent. * represents a value of less than £0.50.
2. Income refers to income before housing costs.
3. Benefit income includes basic state pension, SERPS, graduated pension, income support and housing benefit.
4. Pensioners are defined as those single aged at state pension age or above, or couples in which the husband is aged at state pension age or above.
5. Quintiles for single pensioners and pensioner couples have been calculated separately—i.e. the bottom quintile of single pensioners represents those pensioners in the bottom 20 per cent. of the income distribution of single pensioners.