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SOCIAL SECURITY

Incomes

Mr. Meacher: To ask the Secretary of State for Social Security what percentage of (a) households and (b) individuals have (i) wholly earned, (ii) wholly unearned and (iii) part-earned and part-unearned incomes; and if he will break down the figures by income level. [13483]

Mr. Andrew Mitchell: Such information as is available is in the tables.

14 Mar 1996 : Column: 755

Proportions of individuals in households with household income that is (i) wholly earned (ii) part earned, part unearned (iii) wholly unearned, for each quintile of the income distribution and overall, United Kingdom, 1992-93 Percentage

	Quintiles of income distribution
Percentage of individuals in households where the household income is:	Bottom	Second	Third	Fourth	Top	All individuals
Before housing costs
Wholly earned	1	2	3	5	4	3
Part earned, part unearned	32	55	79	85	88	68
Wholly unearned	68	44	18	11	8	29
All income	100	100	100	100	100	100
After housing costs
Wholly earned	1	2	4	5	3	3
Part earned, part unearned	31	57	79	83	87	68
Wholly unearned	67	41	17	12	10	29
All income	100	100	100	100	100	100

1. Earned income includes income for employment and self-employment. Unearned income includes state pensions and any other income from benefits (including Child Benefit), occupational and personal pensions, investment income, and any other miscellaneous income.

2. The information in the table is derived from the 1992-93 Households Below Average Income dataset. 1992-93 is the latest date for which results are available. Figures for 1992-93 are for two calender years data combined.

3. Each quintile represents 20 per cent. of the income distribution.

4. All estimates are subject to sampling error. Figures may not sum due to rounding.

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Disability Living Allowance

Ms Lynne: To ask the Secretary of State for Social Security what is the estimated increased administrative cost for his Department resulting from the introduction of the Social Security (Disability Living Allowance) Amendment Regulations 1996. [16624]

Mr. Andrew Mitchell: Operational procedures have not yet been finalised, but the administrative costs are not expected to be significant.

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Pensions

Mr. Sheerman: To ask the Secretary of State for Social Security how many individuals currently have their earnings-related pension reduced as a result of payments from a company pension scheme. [18854]

Mr. Heald: As at 31 March 1995, there were 2,305,840 individuals whose additional pension was reduced, or extinguished, as a result of contracted-out deductions in respect of payments from a company or personal pension scheme.

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The contracted-out deduction is the term used to describe the reduction in the additional pension of someone who has been a member of a contracted-out pension scheme or a personal pension scheme used in place of the additional pension.

Ms Corston: To ask the Secretary of State for Social Security, pursuant to his answer of 19 February, Official Report, column 40, (a) what the breakdown in public spending per capita and per recipient is estimated by the Government Actuary to be on (i) retirement pensions, (ii) the state earnings-related pension scheme, (iii) other public pensions and (iv) all publicly provided pensions, (b) what is the corresponding estimate of contributions required per capita and per contributor from national insurance and (c) what is the corresponding estimate of the percentage of gross domestic product of total public spending on pensions, on the basis of the Government's assumption of 1.5 per cent. per annum growth in (1) 1994-95, (2) 2000-01, (3) 2010-11, (4) 2020-21 and (5) 2030-31, at 1994 prices. [19031]

Mr. Heald: The information is not available in the format requested. Public spending on all publicly provided pensions is not held centrally, and could be provided only at disproportionate cost. The Government Actuary's Department does not forecast the number of SERPS recipients.

Such information as is available is shown in the tables:

Breakdown of public spending£

	1994-95	2000-01	2010-11	2020-21	2030-31
Retirement pensions
Per capita	474	514	566	584	693
Per recipient	2,663	2,709	2,710	2,838	2,850
SERPS
Per capita	32	72	141	181	198
Per recipient	n/a	n/a	n/a	n/a	n/a
	Other public pensions
Per capita	18	13	11	20	19
Per recipient	2,485	2,462	2,340	2,600	2,600

Contributions required£

	1994-95	2000-01	2010-11	2020-21	2030-31
	Retirement pensions
Per capita	474	514	566	584	693
Per contributor	1,300	1,313	1,400	1,419	1,753
SERPS
Per capita	32	72	141	181	198
Per contributor	87	185	350	440	502
	Other public pensions
Per capita	18	13	11	20	19
Per contributor	50	32	27	49	47

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Percentage of GDP

Total spending on pensions (i), (ii) and (iii)	Percentage
1994-95	4.4 per cent.
2000-01	4.7 per cent.
2010-11	5.0 per cent.
20020-21	4.7 per cent.
2030-31	4.8 per cent.

1. All figures are based on 1994-95 prices. Spending is rounded to the nearest £1, and percentages are rounded to the nearest 0.1 per cent.

2. Retirement pensions are comprised of basic retirement pension and graduated retirement benefit.

3. Other public pensions are comprised of widows' pension (basic) and widows' pension (additional pension).

4. Expenditure on benefits and population figures are taken from the report by the Government Actuary on the third quinquennial review under section 137 of the Social Security Act 1975.

5. Numbers of recipients and contributors are taken from, or under the Pensions Bill 1994 report by the Government Actuary on the financial provisions of the Bill on the national insurance fund, except for 1994-95 which are based on actual numbers.

6. The number of contributors each year excludes approximately 200,000 people paying class 3 contributions.

7. The underlying GDP figures assume 1.5 per cent. per annum growth from the 1994-95 GDP figure given in table 6A.1 of the Financial Statement and Budget Report 1996-97.

Ms Corston: To ask the Secretary of State for Social Security what estimate he has made of (a) public spending on SERPS and (b) the corresponding contribution rate in respect of SERPS only (i) before the Pensions Act 1995 and (ii) in (1) 1994-95, (2) 2000-01, (3) 2010-11, (4) 2020-21 and (5) 2030-31, at 1994 prices. [19211]

Mr. Heald: There is no corresponding contribution rate in respect of SERPS only. The contribution rate is a global figure calculated so that it is sufficient to pay all national insurance fund benefits on a pay-as-you-go basis. However, some indication of a contribution rate equivalent to net SERPS expenditure is given in the table.

Percentage

	1994-95	2000-01	2010-11	2020-21	2030-31
	Pre Pensions Act 1995
Net SERPS expenditure £ billion	1.8	4.2	9.2	14.5	18.7
Equivalent contribution rate	0.8	1.5	2.6	3.7	4.5
	Post Pensions Act 1995
Net SERPS expenditure £ billion	1.8	4.2	8.4	10.9	12.0
Equivalent contribution rate	0.8 per cent.	1.5 per cent.	2.4 per cent.	2.8 per cent.	2.8 per cent.

Notes:

1. The principle underlying the table is that if, say, estimated net SERPS expenditure equals one-quarter of total expenditure on national insurance fund benefits then one-quarter of the contribution rate necessary to balance the Fund pays for the net SERPS. Hence, the lower is net SERPS expenditure the lower the equivalent contribution rate will be.

2. The contribution rate in the above table is that part of the gross class 1 contribution rate required to meet the estimated cost of net SERPS. However, it is assumed that a similar proportion of class 2, 3 and 4 contributions is also used to meet the cost of net SERPS.

3. The expenditure on net SERPS is in respect of retirement pensions only and is in 1994-95 prices.

Source:

Government Actuary's Department.

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