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Retirement Pensions

Volume 979: debated on Tuesday 26 February 1980

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asked the Secretary of State for Social Services what is his estimate of the financial effect over a period of 12 months on State retirement pensions for a married couple and a single person when the criteria for increasing them is confined to price rises only.

I assume that the hon. Member has in mind the effect of moving from the existing provisions, whereby retirement pensions have to be increased at least in line with the estimated movements in prices or in the general level of earnings, whichever is the greater, to an increase at least in line with the estimated movement in prices, as provided for in clause 1 of the Social Security Bill currently before the House. These new provisions would only have a financial effect when the estimated movement of earnings exceeded the estimated movement of prices over the 12 months to the date when pensions were to be increased. In that situation, and at current pension rates, for each 1 per cent. by which the estimated increase in earnings exceeded the estimated increase in prices, the increase in the standard rate of basic pension would be about 23p a week less for a single person and about 37p less for a married couple, or about £12·00 and £19·50 a year respectively.

asked the Secretary of State for Social Services what has been the increase in the real value of the basic rate of retirement pension since 1955 for single people and married couples, respectively.

On the basis of the movement in the general index of retail prices between April 1955 and November 1979, when retirement pensions were last increased, the real value of the basic pension for a single person increased over that period by 108 per cent. and that for a married couple by 105 per cent.