Skip to main content

Invalidity Pension

Volume 165: debated on Friday 19 January 1990

The text on this page has been created from Hansard archive content, it may contain typographical errors.

To ask the Secretary of State for Social Security what is the estimated saving in each year up to 2030–31 resulting from the phasing out of entitlement to earnings-related invalidity pension, gross and net of additional spending on invalidity allowance.

[holding answer 16 January 1990]: The available information on gross savings from ending the accrual of new rights to invalidity benefit additional pension is given in the table. The estimates are based on long-term projections of expenditure on additional pension which are subject to considerable margins of error; the savings estimates beyond 2000–01 are particularly uncertain. Since annual figures would therefore imply a spurious precision, the estimates are given at five-year intervals. Projections beyond 2025–26 are not available.

Effect on expenditureGross change in additional pension expenditure at constant 1989–90 prices £ million (saving)
1991–92nil
1992–9310
1993–9430
1995–96120
2000–01475
2005–06800
2010–111,025
2015–161,225
2020–211,525
2025–261,825
These are gross savings in additional pension expenditure before offsetting adjustments to invalidity allowance and income-related benefits. I shall write to the hon. Member enclosing estimates isolating the effect of invalidity allowance when these are available.

To ask the Secretary of State for Social Security what is his estimate of the expenditure on the additional component to invalidity pension that would be incurred in each of the next 20 years (a) under pre-1986 legislation, (b) under current legislation and (c) under the proposals in "The Way Ahead"; and if he will make a statement.

(a) Information on additional pension expenditure under pre-1986 legislation is not available and could be provided only at disproportionate cost.

(b) and (c) Projections of expenditure under current legislation and under the proposals in "The Way Ahead" (Cm. 917) are as follows. These estimates are subject to considerable margins of uncertainty, particularly in the longer term. Since the precision implied by annual estimates would therefore be spurious, the long-term projections are given at five-year intervals.

Projected expenditure on invalidity benefit additional pension at constant 1989–90 prices

£ million

(b) current legislation

(a) Cm. 917 proposals

1990–91565565
1991–92690690
1992–93820810
1993–94950920
1995–961,2251,100
2000–011,8501,375
2005–062,1251,325
2010–112,2251,200
2015–162,3501,125

The figures illustrating the effect of the proposals in "The Way Ahead" show the gross effect on expenditure. The net effect on social security spending will be less because of offsetting changes in invalidity allowance and income-related benefits.

To ask the Secretary of State for Social Security what is his estimate of the reduction in national insurance contributions consequent on the proposed abolition of additional component to invalidity pension; and if he will make a statement.

The level of contributions depends on the overall demands on the national insurance fund. The expenditure implications of the proposed change in invalidity benefit will be taken into account in determining future levels of contributions.