To ask the Secretary of State for Social Security what is the estimated total amount payable to personal pension schemes from the national insurance fund in respect of the year 1991–92; and what increase in the basic retirement pension could be given at the same cost.
[holding answer 24 January 1992]: By December 1991, 4·6 million people had taken out personal pensions as an alternative to remaining in SERPS. The Government Actuary estimates that the amount of revenue foregone by the national insurance fund in respect of 1991–92 will be £2,740 million made up of £2,055 million in respect of the contracted out rebate, similar to that available to contracted-out occupational pension schemes, and £685 million in respect of the additional 2 per cent. incentive.This gross cost does not take into account the numbers of people who would join a contracted out occupational pension scheme if appropriate personal pensions were not available, nor does it take into account the future reduced burden of the national insurance fund brought about by people being in receipt of a personal pension rather than SERPS.The gross sum referred to above would not, therefore, be available to fund increases in the basic retirement pension.