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National Insurance Fund

Work and Pensions written question – answered on 10th January 2008.

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Photo of Alan Simpson Alan Simpson Labour, Nottingham South

To ask the Secretary of State for Work and Pensions what assessment he has made of the effect of employers paying employee pensions contributions at the reduced rate on national insurance fund revenue in the last three years.

Photo of Mike O'Brien Mike O'Brien Minister of State (Pension Reform), Department for Work and Pensions

The information is in the following table.

Cost of contracted-out rebat e
£ billion
Tax year
2004-05 2005-06 2006-07
Type of scheme Employer Employee Employer Employee Employer Employee
Occupational DB 4.6 2.1 4.8 2.2 5.0 2.3
Occupational DC 0.1 0.3 0.1 0.3 0.1 0.3
Note:

1. Rebate expenditure for all years is estimated and based on the latest available contracting-out data in 'Second Tier Pension Provision'.

2. Figures are for the UK and expressed in cash terms.

3. The cost of paying the rebate will be balanced in the longer term by a reduction in the cost of the additional state pension.

Source:

Department for Work and Pensions

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