§ Lord Higginsasked Her Majesty's Government:
What percentage of the cost of the basic state pension is covered by national insurance contributions. [HL2294]
§ The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Hollis of Heigham)The National Insurance Scheme is financed on the pay-as-you-go principle, with current rates of national insurance contributions set to produce the income needed to meet current expenditure on benefits214WA and the costs of administration, as well as maintaining a reasonable working balance in the fund. In addition a Treasury grant from the Consolidated Fund can be used to supplement revenue from contributions and investment income. The cost of the basic state pension is therefore met in full by national insurance funds.