SERPS: Contracting-Out Terms

HL Deb 11 May 1998 vol 589 cc102-3WA

Baroness Castle of Blackburn

asked Her Majesty's Government:

What sized pension would accrue to those who contract out of SERPS for the rest of their working life and invest the rebate in an appropriate personal pension at the ages of 25, 35 and 45 respectively. [HL1540]

Baroness Hollis of Heigham

Based on the assumptions used by the Government Actuary in hisReview of Certain Contracting-Out Terms (Cm 3888), an individual investing only the National Insurance contribution rebate in an appropriate personal pension (APP) would receive a pension broadly equivalent to that which they would get from the State Earnings Related Pension Scheme (SERPS). In practical terms, the amount of pension will depend on actual investment performance. If the rate of return was higher than that assumed by Government Actuary's Department, it would produce a higher pension.