§ Mr. WigleyTo ask the Secretary of State for Social Security if he will estimate the level of the basic state pension if it represented the same percentage of the average wage as it did in November 1982; and if he will estimate what would be the annual cost of raising the basic state pension to that level. [122682]
§ Mr. RookerThe information is in the tables.
The link between the basic pension and average earnings was broken in 1979. No-one is expected to live on the basic pension alone. Latest figures for single pensioner incomes are £132 a week, 36 per cent. of average earnings.
Rate of full category A basic state pension, assuming same percentage of average earnings as November 1982 April 1999 April 2000 Average weekly earnings £400.10 1£422.51 Basic pension rate as a percentage of earnings in November 1982 23.1 23.1 Assumed rate of basic pension £92.40 £97.60 1Assumed
Costs of raising basic state pension to levels shown in Table 1 £ billion 1999–2000 2000–01 Gross 14.8 17.3 Net 11.7 13.8 Notes:
1. Average weekly earnings figure for April 1999 is for all full-time employees, taken from the New Earnings Survey. An equivalent April 2000 earnings figure is not available. The assumption used to derive April 2000 figure is that April 1999 earnings grow by 5.6 per cent. over following year (based on March 2000 annual growth in the average earnings index).
2. Basic state pension rates are rounded to the nearest 5p.
3. Costs are rounded to the nearest £100 million and are in 2000–01 benefit rate terms.
4. Gross costs are estimated by the Government Actuary's Department.
5. Costs net of income-related benefits are estimated using the Policy Simulation Model.
6. Source of pensioners' incomes figure Family Resources Survey and New Earnings Survey.
7. The latest data for which pensioners' incomes estimates are available is 1997–98. This is expressed as a percentage of average earnings in April 1997, £368.