§ Lord Oakeshott of Seagrove Bayasked Her Majesty's Government:
What is their estimate of the net additional cost to the Exchequer in 2011–12, 2013–14 and 2015–16 if the basic state pension were increased in April 2006 by £7 for a single person and £11 for a couple and then increased annually in line with average earnings with no change in other relevant plans and policies; and how this compares with present projections. [HL4753]
§ The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Hollis of Heigham)We currently uprate the basic state pension by either 2.5 per cent or the retail prices index (RPI), whichever is higher, and will do so for the remainder of this Parliament. On this basis, we estimate that the basic state pension in 2011 will be £95.30 for single pensioners and £152.40 for pensioner couples.
Increasing the basic state pension by £7 in 2006, and thereafter uprating by earnings, would result in single pensioners receiving £110.65 and pensioner couples, £176.60.
Therefore, the net additional costs, for all pensioners, of increasing the basic state pension by £7 in 2006, and thereafter uprating by earnings, compared with uprating the basic state pension by the retail prices index, for the years 2011–12 to 2015–16, are as set out in the table.
Net additional costs for all pensioners of increasing the basic state pension by £7 in 2006, and thereafter uprating by earnings, compared with uprating the basic state pension by the retail prices index, for the years 2011–12 to 2015–16 Year 2011–12 2012–13 2013–14 2014–15 2015–16 Net cost 4.5 5.2 5.9 6.6 7.4 (£ billions) Notes:
1. All costs are rounded to the nearest £100 million and are in 2003–04 price terms.
2. Gross costs are calculated by the Government Actuary's Department and are consistent with Budget 2003 assumptions.
3. The net costs are calculated using the DWP policy simulation model for 2005–06. The net cost represents the cost after allowing for any offsetting savings in income-related benefits.