State Pension

HC Deb 03 February 2000 vol 343 cc716-7W

Mr. Burstow

To ask the Secretary of State for Social Security if he will estimate the cost and amount of state second pension payable on retirement in(a) 2005, (b) 2010, (c) 2015, (d) 2025, and (e) 2047 on the assumption that the accruals rate for band one is set at (a) 80 per cent., (b) 70 per cent., (c) 60 per cent. or (d) 50 per cent. in year one of the State Second Pension and reduced to 40 per cent. in (i) nine years, (ii) 10 years and (iii) 15 years. [106851]

Mr. Rooker

[holding answer 26 January 2000]: The information is in the tables.

Table 1 shows the extra cost of the various options specified in the years requested the costs for State Second Pension based on the proposals contained in the Child Support, Pensions and Social Security Bill.

Table 2 shows the weekly amount of SERPS and State Second Pension in payment at retirement for the years requested based on the accrual options specified in the question. The figures are given in 1999–2000 earnings

Table 2: Weekly amount of SERPS and State Second Pension payable based on different accrual rate options in 1999–2000 earnings terms
£ at 1999–2000 earnings terms
	Accrual rate (%)	2005	2010	2015	2025	2047
Current proposals	40	28	30	32	37	51
Accrual rate for 2002–09	80	34	42	43	45	59
	70	32	39	40	43	57
	60	31	36	38	41	55
	50	29	33	35	39	53
Accrual rate for 2002–10	80	34	42	44	46	60
	70	32	39	41	44	58
	60	31	36	38	41	56
	50	29	33	35	39	53
Accrual rate for 2002–15	80	34	42	50	52	65
	70	32	39	45	48	62
	60	31	36	41	44	58
	50	29	33	37	40	55

Notes:

1. Figures are in 1999–2000 earnings terms, ie expressed at a constant level of prices and real earnings. This makes it easier to compare the figures across different years of retirement.

2. All estimated State Second Pension payments include SERPS payments on SERPS accrued before 2002 and are rounded to the nearest whole pound. The State Second Pension is assumed to be introduced in 2002.

3. All calculations are based on a full working life of 49 years. Earnings at the lower earnings threshold (£9,500 a year) have been assumed in every year of the working life.