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State Retirement Pensions

Volume 475: debated on Wednesday 7 May 2008

To ask the Secretary of State for Work and Pensions if he will estimate the cost to the Exchequer, net of savings in means-tested benefits and additional tax revenues, of paying a full basic state pension to each individual, regardless of contribution record, at the rate of the guarantee credit, from the age of (a) 68, (b) 69 and (c) 70 years of age from 2010; and if he will estimate in each case the cost in each of the following four years on the assumption that the pension was then indexed to earnings. (200641)

The information requested is in the following table.

Estimated net additional annual cost of paying a full basic state pension to all individuals aged (a) 68 years or over, (b) 69 years or over, and (c) 70 years or over, regardless of their national insurance contribution records, at the rate of the guarantee credit, from 2010

£ billion—2008-09 prices

(a)

(b)

(c)

2010

12

11

10

2011

13

12

11

2012

13

12

11

2013

14

13

11

2014

15

13

12

Notes:

1. Estimates have been rounded to the nearest £ billion and are presented in financial years (e.g. 2010 refers to the financial year 2010-11).

2. Estimates relate to individuals living in the United Kingdom.

3. The guarantee credit level has been defined as the standard minimum guarantee for a single pensioner with no additional premiums (i.e. currently £124.05 per week), increased by average earnings in future years. Treasury economic assumptions have been used to model earnings uprating.

4. The estimates are presented net of savings in income related benefits and additional tax revenues, which have been estimated using the Department’s Policy Simulation Model.

Source:

DWP modelling