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Retirement Pensions

Volume 226: debated on Wednesday 16 June 1993

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To ask the Secretary of State for Social Security (1) what percentage of the national insurance fund has been paid out in national insurance rebates, tax reliefs and other incentives in respect of personal pensions contracted out of the state earnings-related pension scheme for 1992–93; and what is the equivalent expected percentage for the years 1993–94 and 1994–95;(2) what was the cost of the national insurance rebates, tax reliefs and other incentives paid in respect of personal pensions contracted out of the state earnings-related pension scheme for 1992–93; and what are the equivalent expected costs for 1993–94 and 1994–95.

The information is in the table. Tax relief is not a cost to the national insurance fund and has not been included in the figures. The percentages are the estimated cost of the rebates and incentives as a percentage of the estimated gross contribution income to the national insurance fund.

Personal Pensions
YearCost (£ billion)Per cent.
1992–932·507
1993–942·657
1994–951·805

Source: Government Actuary's Department.

To ask the Secretary of State for Social Security what are the average annual earnings of those who have contracted out of the state earnings-related pension scheme (a) via an occupational pension scheme and (b) in favour of a personal pension plan.

Information on those contracting out of the state earnings related scheme via an occupational pension scheme is not immediately available. I will write to the hon. Member as soon as it is. Such information as is available is that the average earnings of members of occupational pension schemes (including those which are not contracted out of the state earnings related scheme) in calendar year 1991, were £16,200 per annum. Average earnings of personal pension optants in the tax year 1990–91 are estimated to be £10,300 per annum.

Sources: Occupational Pension Schemes—General Household Survey. Personal Pension Schemes—1 per cent. of National Insurance contributors.