§ Lord Blackwellasked Her Majesty's Government:
What is their estimate of the annual sum that would need to be invested during the remaining normal working lifetime of men and women aged (a) 16, (b) 20, (c) 25 and (d) 30 to accumulate a capital sum on retirement that would secure the equivalent income from investments as is promised by the basic state pension after taking account of the recent announcements on increased payment levels, and assuming future uplifts in line with inflation. [HL4662]
§ Baroness Hollis of HeighamEstimates of the annual amounts that would need to be invested in order to generate a private pension equivalent to the basic state pension are in the table below.
Age Men Women All 16 520 580 550 20 600 680 640 25 740 840 790 30 920 1,040 980 Source: Government Actuary's Department
Notes
1. All figures are rounded to the nearest £10.
2. The figures quoted are £ a year, in year 2000 money terms, and these amounts are assumed to increase in line with increases in prices.
§ Lord Blackwellasked Her Majesty's Government:
What is their estimate of the total annual funding in £ billion that would be required if all working men and women aged under 30 made an annual pension investment sufficient to accumulate a capital sum on retirement that would secure the equivalent income from investments as is promised by the basic state pension after taking account of recent announcements on increased payment levels; and what that annual funding requirement would be after 5, 15, 25 and 35 years if all new entrants into the workforce were funded on the same basis. [HL4663]
§ Baroness Hollis of HeighamFrom April 2001, the basic state pension will be £72.50 for single people and £115.90 for couples. From April 2002, the figures will be £75.50 and £120.70 respectively. The table below shows the estimated total expenditure that would be needed to provide people under 30 and currently working with a private pension equivalent to the basic state pension on retirement. The table shows that shifting from the existing pay-as-you-go state system to a funded private system in this way would cost £5 billion in 2000 rising to £14 billion in 2035.
Great Britain, £ billions in 2000–2001 terms 2000 2005 2015 2025 2035 Annual total premia 5 6 10 13 14 Source:
Government Actuary's Department.
Notes:
1. All figures have been rounded to the nearest £ billion.