Old-Age and Retirement Pensions

Oral Answers to Questions — Pensions and National Insurance – in the House of Commons at 12:00 am on 6th May 1957.

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Photo of Mr Eric Johnson Mr Eric Johnson , Manchester, Blackley 12:00 am, 6th May 1957

asked the Minister of Pensions and National Insurance what would be the net cost of increasing all retirement pensions by £1 a week but postponing retiring age until 68 for men and 63 for women and abolishing the present system of increments for postponing retirement.

Photo of Mr John Boyd-Carpenter Mr John Boyd-Carpenter , Kingston upon Thames

It is estimated that the cost to the National Insurance Fund of increasing immediately all existing retirement pensions, including allowances for dependent wives under pension age, by £1 a week would be about £240 million a year. If for future pensioners the minimum pension age were raised to 68 for men and 63 for women and the present system of increments for postponing retirement were abolished, the net cost of the increase in pensions would not be substantially different in 20 years' time, although it would be rather less in the intervening years. These costs take no account of any consequential increases in other benefit rates.

Photo of Sir Keith Joseph Sir Keith Joseph , Leeds North East

asked the Minister of Pensions and National Insurance the capital value of a retirement pension to a married man reaching pension age next year; and what is the maximum amount he could have contributed to-wards it as an employed person.

Photo of Mr John Boyd-Carpenter Mr John Boyd-Carpenter , Kingston upon Thames

The capital value of a retirement pension to a married man reaching pension age next year, with a wife five years younger than himself, is about £2,150. The maximum amount of the contributions that the employed person could have paid would be about £90. The employer would have contributed a similar amount.

Photo of Sir Keith Joseph Sir Keith Joseph , Leeds North East

Will the Minister consider giving the details of this very remarkable bargain in the explanatory literature which is sent out to those going on to retirement pensions?

Photo of Mr John Boyd-Carpenter Mr John Boyd-Carpenter , Kingston upon Thames

I will, of course, consider my hon. Friend's suggestion, but no doubt his Question and my Answer will receive a certain amount of attention.

Photo of Sir Keith Joseph Sir Keith Joseph , Leeds North East

asked the Minister of Pensions and National Insurance what is the capital value of a retirement pension to a married man reaching pension age next year; and what is the maximum amount he could have contributed to wards it as an employed person if he first entered insurance on 5th July, 1948.

Photo of Mr John Boyd-Carpenter Mr John Boyd-Carpenter , Kingston upon Thames

The capital value of a retirement pension to a married man reaching pension age next year, with a wife five years younger than himself, is about £2,150. The maximum amount of the contributions that the employed person could have paid if he first entered insurance on 5th July, 1948, would be about £60. His employer would have contributed a similar amount.

Photo of Miss Irene Ward Miss Irene Ward , Tynemouth

asked the Minister of Pensions and National Insurance the total contribution in money paid in respect of a retirement pension for a man fully employed and paying Income Tax from the age of 21.

Photo of Mr John Boyd-Carpenter Mr John Boyd-Carpenter , Kingston upon Thames

At current rates of contribution and Income Tax, the net amount actually paid in respect of retirement pension over his insurance life by an insured man, who qualified for full Income Tax relief from the age of 21 onwards, would be about £250.

Photo of Miss Irene Ward Miss Irene Ward , Tynemouth

asked the Minister of Pensions and National Insurance the amount paid by a fully employed man who is a late entrant for a retirement pension, taking into account full Income Tax relief in respect of contributions; and what is the comparable amount where no Income Tax is payable and thus no relief obtained.

Photo of Mr John Boyd-Carpenter Mr John Boyd-Carpenter , Kingston upon Thames

An employed man who was a late-age entrant for retirement pension and will reach pension age next year would have paid a maximum of about £33 in contributions, taking into account full Income Tax relief; and about £60 if no such relief were obtained.

Photo of Miss Irene Ward Miss Irene Ward , Tynemouth

What does my right hon. Friend think is the answer to the problem of making people who do not pay Income Tax pay more for their insurance benefits than people who are paying Income Tax? Will he please not give me the reply which is usual in these circumstances, that, of course, any benefits obtained afterwards are subject to Income Tax payments, because that does not answer the Question?

Photo of Mr John Boyd-Carpenter Mr John Boyd-Carpenter , Kingston upon Thames

I understand my hon. Friend's view on this matter, but for some years it has been considered that, in general, it was to the advantage of contributors and beneficiaries of National Insurance to adjust the tax payments in the present way.