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Dept of Social Security

Answer

Mr. Thompson: To ask the Secretary of State for Social Security if he will list for each year from 2020 to 2040 the impact on public expenditure of the equalisation of state pension age at 65 years and the reforms of the state earnings --related pension scheme 1995; and what is the projected revenue forgone as a result of basic pension plus in these years. [21484] Mr. Heald: Information relating to every year from 2020 to 2040 is not available. The measures in the Pensions Act 1995{1} will produce public expenditure savings of over £6 billion in 2020, over £9 billion in 2030, and over £10 billion in 2040{2}. Under basic pension plus, the value of the new rebates less the impact of the proposed tax changes will grow by a net average amount of about £160 million a year, reaching a peak of about £7 billion or 1/2 per cent. of GDP around 2040. The starting cost of the new scheme will depend on the precise age limit chosen. Note {1} These measures include equalisation of state pension age, annualisation of SERPS, breaking the links between SERPS and contracting-out, and the introduction of age-related rebates for appropriate personal pensions and contracted-out money purchase schemes. {2} The savings in expenditure for the national insurance fund will be £7 billion in 2020, over £10 billion in 2030 and £12 billion in 2040.

Secondary information

Type

Written question

Reference

21484; 292 c907-8W

Session

1996-97

Subjects

Age Expenditure Pensions Personal pensions State retirement pensions Retirement State earnings related pension scheme

Contains statistics

Yes