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National Insurance Pension Calculations

Volume 414: debated on Wednesday 29 October 1980

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asked Her Majesty's Government:Under what headings the amount of the National Health and Social Security pension is calculated; on what basis any increase is arrived at; and, since there is a lack of knowledge of many pensioners, whether they will publish the figures under such headings as food, clothing, heating, rent, etc.

The national insurance retirement pension is a contributory benefit commonly made up of one or more of the following elements: basic pension, earnings-related additional pension, graduated pension, increments for deferred retirement and an increase for a dependent wife under pensionable age.The level of the standard rate of basic pension, which from 24th November this year will be £27·15 for a single person and £43·45 for a married couple, reflects the increases which successive Governments have made to the rates established in 1948, when the present national insurance scheme was introduced. Additional pension and graduated pension are earnings-related benefits and the amount payable to any particular pensioner is determined by that pensioner's earnings over a relevant past period. The amount of increments reflects the extent which a pensioner deferred his retirement beyond pensionable age.Under the present statutory provisions, pensions have to be increased annually at least in line with the expected movement in the general level of prices since the last pension increase. Movements in the general level of prices are measured by the movements in the general index of retail prices which covers a wide range of goods and services, including food, clothing, heating and rent.The non-contributory supplementary pension scale rates will, from November this year, be aligned with the rate of the basic retirement pension. Additions for housing needs and possibly for other special circumstances may be awarded.

Neither the national insurance basic retirement pension nor the supplementary pension scale rates contain specific amounts related to particular expenses.