§ Dr. Lynne JonesTo ask the Secretary of State for Social Security what is his estimate of the additional annual cost of the minimum income guarantee if annual increases are in line with earnings rather than prices in(a) 2005, (b) 2010, (c) 2020 and (d) 2050; and what would be the further cost in each of those years of paying the basic state pension at the same rate as the minimum income guarantee. [105474]
§ Mr. RookerEstimates for the cost of the Minimum Income Guarantee (MIG) for the years shown are not available. This is because it is extremely difficult to obtain accurate projections of the future level and distribution of income and assets.
The cost of paying the basic State pension, including linked benefits, at the same rate as the MIG is shown in the table. The net cost takes into account savings made in means-tested benefits.
171W
£ billion Gross cost Net cost 2005–06 10.8 8.7 2010–11 15.7 13.5 2020–21 28.3 24.6 2050–51 87.3 — Notes:
1. Figures are in £ billion and are in 2000–01 price terms.
2. Figures are rounded to the nearest £100 million.
3. Gross costs are estimates provided by the Government Actuary's Department. Costs net of means-tested benefits have been calculated using the 1999–2000 Policy Simulation Model based on the 1996–97 Family Resources Survey, and by PENSIM, a dynamic microsimulation model used to project pensioners' incomes to 2025. Net cost estimates for 2050–51 are not available.