§ Sir Andrew BowdenTo ask the Secretary of State for Social Security what would be the value of the 25p age addition to the retirement pension in 1997–98 if it had been uprated by(a) prices and (b) earnings since its introduction; and if he will estimate how much it would cost to increase it to these levels. [14281]
§ Mr. HealdThe 25p age addition to the retirement pension was first introduced in September 1971. In 1997–98 it would be worth £1.70 if uprated by prices and £3.80 if uprated by average earnings1. The estimated costs are in the table2
Age addition in 1997–98 Uprated by prices to £1.70 Uprated by earnings to £3.80 Gross cost £180 million £440 million Net cost £110 million £260 million 1 The uprated value of the age addition has been calculated by assuming that it was uprated each time Retirement Pension was uprated and all calculations were rounded to the nearest 5p at each uprating date. The upratings have been calculated using either the Average Earnings Index (whole economy unadjusted) as published by the Office for National Statistics or the Retail Prices Index (all items) as appropriate. 2All costs are rounded to the nearest £10 million. The gross costs of uprating were estimated by the Government Actuary's Department. The costs net of the impact on income-related benefits have been calculated using offset ratios of 42 per cent.