Hansard

National Insurance Fund

Volume 268: debated on Wednesday 20 December 1995

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Mr. Denham

To ask the Secretary of State for Social Security if he will estimate the cost to the national insurance fund of all current holders of an appropriate personal pension with an annual income of (a) £2,000 or below, (b) up to £3,000, (c) up to £4,000, (d) up to £5,000, (e) up to £6,000, (f) up to £7,000, (g) up to £8,000, (h) up to £9,000 and (i) up to £10,000, opting back in to SERPS in 1995–96 basing this estimate on the assumptions that (i) those contracting into SERPS continue within SERPS up to the year 2050 instead of being in an APP and (ii) future earnings remain the same in real terms. [5523]

Mr. Heald

Information is not available in the format requested. Such information as is readily available is in the table, and is based on the following assumptions:

  • (i) the year in which opting into SEEPS is assumed to take place is 1997–98;
  • (ii) earnings have been assumed to increase with age and, in addition, by 1.5 per cent. above prices for each age level;
  • (iii) not all earners have been assumed to work until they reach State pension age.

    • Extra SERPS expenditure in selected years if APP holder in low earnings bands opt back into SERPS

    £ million 1995–96 prices

    Earnings band for opting back into SERPS

    2010–11

    2020–21

    2030–31

    2040–41

    2050–51

    2,000

    		—————

    3,000

    		—————

    4,000

    		0001010

    5,000

    		00205050

    6,000

    		01040130120

    7,000

    		11080250240

    8,000

    		120130420400

    9,000

    		230200650610

    10,000

    		350300920860
  • 1. Little extra cost until 2010 as most APP holders are under age 45.
  • 2. Estimates of numbers affected based on data for 1993–94, the most recently available, used to estimate proportions of APP holders in respect of people in the earnings bands quoted.
  • 3. Earnings under £3,000 would not accrue SERPS so no financial effect in respect of that year.
  • 4. Earnings have been used, as a breakdown by income is not available.
  • 5. All expenditure of £10 million and above has been rounded to the nearest £10 million.