---

State Pensions

Mr. Flynn: To ask the Secretary of State for Social Security if she will ensure that individuals deciding to contract out of SERPS are sent before making that decision, a simple explanation of the scheme and the respects in which it differs from occupational and personal pension schemes. [10572]

Mr. Denham: We publish a booklet NP46 "A Guide to Retirement Pensions" which contains a comprehensive guide to SERPS and information on contracting-out of SERPS. This is available from DSS offices.

On 17 July, we announced a wide-ranging review of pensions which will address nine fundamental challenges. One of these is to raise awareness of pensions and improve the level of financial education so that people understand the importance of saving for retirement and make the right choice about which pension product is best for them.

Mr. Flynn: To ask the Secretary of State for Social Security what estimate she has made of the weekly state basic earnings-related and total pensions payable to men and women on average earnings and half average earnings

25 Jul 1997 : Column: 779

reaching pension age in (a) 1997, (b) 2007, (c) 2017, (d) 2027, (e) 2037 and (f) 2047, (i) in cash terms and (ii) as a percentage of their pre-retirement earnings, assuming that the basic pension and the earnings limits for contributions are uprated in line with (1) prices and (2) average earnings. [10570]

Mr. Denham: The information is in the tables:

Table 1: Amount of standard rate basic RP from April 1997, rounded to the nearest 5p in cash prices£

	1997	2007	2017	2027	2037	2047
Uprated by prices	62.45	76.05	92.70	113.00	137.70	167.90
Uprated by earnings	63.30	89.55	126.70	179.25	253.60	358.75

Table 2: standard rate basic RP as a percentage of male and female average earnings as at April in the year preceding retirement; assuming basic RP is uprated in line with pricesPer cent.

	1997	2007	2017	2027	2037	2047
Male	16	14	12	10	9	7
Female	22	19	16	14	12	10

Table 3: standard rate basic RP as a percentage of half male and female average earnings as at April in the year preceding retirement; assuming basic RP is uprated in line with pricesPer cent.

	1997	2007	2017	2027	2037	2047
Male	37	27	23	20	17	15
Female	43	37	32	27	24	20

Table 4: standard rate basic RP as a percentage of male and female average earnings as at April in the year preceding retirement; assuming basic RP is uprated in line with earnings from April 1997Per cent.

	1997	2007	2017	2027	2037	2047
Male	16	16	16	16	16	16
Female	22	22	22	22	22	22

Table 5: standard rate basic RP as a percentage of half male and female average earnings as at April in the year preceding retirement; assuming basic RP is uprated in line with earnings from April 1997Per cent.

	1997	2007	2017	2027	2037	2047
Male	31	31	31	31	31	31
Female	43	43	43	43	43	43

25 Jul 1997 : Column: 780

Table 6: Additional Pension based on a person with average earnings throughout their working life expressed in cash prices and as a percentage of male and female average earnings as at April in the year preceding retirement; assuming basic RP and earnings limit increase in line with prices

	1997	2007	2017	2027	2037	2047
Male (cash prices)	£80.80	£111.20	£144.90	£195.20	£224.10	£313.30
Male (as percentage of average earnings)	20	20	18	17	15	14
Female (cash prices)	£52.00	£72.40	£97.10	£137.50	£189.30	£264.40
Female (as percentage of average earnings)	18	18	17	17	17	16

Table 7: Additional Pension based on a person with half average earnings throughout their working life expressed in cash prices and as a percentage of half male and female average earnings as at April in each year; assuming basic RP and earnings limit increase in line with prices

	1997	2007	2017	2027	2037	2047
Male (cash prices)	£31.40	£44.10	£59.60	£85.20	£120.60	£180.00
Male (as percentage of half average earnings)	16	16	15	15	15	16
Female (cash prices)	£16.20	£23.90	£33.50	£49.40	£75.30	£115.70
Female (as percentage of half average earnings)	11	12	12	12	13	14

Table 8: Additional Pension based on a person with average earnings throughout their working life expressed in cash prices and as a percentage of male and female average earnings as at April in each year; assuming basic RP and earnings limit increase in line with earnings from April 1997

	1997	2007	2017	2027	2037	2047
Male (cash prices)	£80.80	£110.80	£146.00	£203.20	£271.40	£386.50
Male (as percentage of half average earnings)	20	20	18	18	17	17
Female (cash prices)	£52.00	£72.00	£95.40	£133.30	£181.20	£258.10
Female (as percentage of half average earnings)	18	18	17	16	16	16

Table 9: Additional Pension based on a person with half average earnings throughout their working life expressed in cash prices and as a percentage of half male and female average earnings as at April in each year; assuming basic RP and earnings limit increase in line with earnings from April 1997

	1997	2007	2017	2027	2037	2047
Male (cash prices)	£31.40	£43.00	£58.00	£81.00	£110.60	£157.60
Male (as percentage of half average earnings)	16	15	15	14	14	14
Female (cash prices)	£16.20	£23.50	£31.80	£45.20	£65.30	£93.40
Female (as percentage of half average earnings)	11	12	11	11	11	12

25 Jul 1997 : Column: 781

Table 10: Total RP expressed in cash terms and as a percentage of male and female average pre-retirement earnings as at April in each year; where basic RP is uprated by prices

	1997	2007	2017	2027	2037	2047
Male (cash prices)	£143.20	£187.20	£237.60	£308.20	£381.00	£481.20
Male (as percentage of half average earnings)	36	33	30	27	24	21
Female (cash prices)	£114.50	£148.50	£189.80	£250.50	£327.00	£432.30
Female (as percentage of half average earnings)	40	37	33	31	29	27

Table 11: Total RP expressed in cash terms and as a percentage of half male and female average earnings as at April in each year; where basic RP is uprated by prices

	1997	2007	2017	2027	2037	2047
Male (cash prices)	£93.80	£120.10	£152.30	£198.20	£258.40	£347.80
Male (as percentage of half average earnings)	47	43	38	35	32	31
Female (cash prices)	£78.60	£100.00	£126.20	£162.40	£213.10	£283.60
Female (as percentage of half average earnings)	55	49	44	40	37	35

Table 12: Total RP expressed in cash terms and as a percentage of male and female average earnings as at April in each year; where basic RP is uprated by earnings

	1997	2007	2017	2027	2037	2047
Male (cash prices)	£144.10	£200.30	£272.70	£382.50	£525.00	£745.30
Male (as percentage of half average earnings)	36	36	34	34	33	33
Female (cash prices)	£115.30	£161.60	£222.20	£312.60	£434.80	£616.80
Female (as percentage of half average earnings)	40	40	39	38	38	38

25 Jul 1997 : Column: 782

Table 13: Total RP expressed in cash terms and as a percentage of half male and female average earnings as at April in each year; where basic RP is uprated by earnings

	1997	2007	2017	2027	2037	2047
Male (cash prices)	£94.70	£132.50	£184.60	£260.30	£364.10	£516.40
Male (as percentage of half average earnings)	48	47	46	46	46	46
Female (cash prices)	£79.50	£113.00	£158.50	£224.40	£318.80	£452.20
Female (as percentage of half average earnings)	56	56	55	55	56	56

Notes:

1. Assumed real earnings growth of 1.5 per cent. a year and prices increase by 2 per cent. per annum. Retirement date is assumed to be the 1 April of each year in question.

2. All amounts are in cash prices. Amounts of AP are rounded to the nearest 10p, amounts of RP are rounded to the nearest 5p.

3. Percentages are rounded to the nearest 1 per cent.

Source:

Average earnings are taken from the New Earnings Survey 1996.

---