Work and Pensions written question – answered at on 13 May 2013.
Gregg McClymont
Shadow Minister (Work and Pensions)
To ask the Secretary of State for Work and Pensions if he will estimate the cost to the public purse of setting the new single tier state pension at (a) £160 per week and (b) £180 per week.
Steve Webb
The Minister of State, Department for Work and Pensions
The following table presents estimates of the additional cost of setting the single-tier pension at £160 or £180 per week, compared to the current state pension system.
| £ billion, nominal cash terms | |||||
| 2020 | 2030 | 2040 | 2050 | 2060 | |
| £160 per week | 1 | 8 | 26 | 46 | 60 |
| £180 per week | 1 | 20 | 73 | 147 | 213 |
| Notes: 1. Single tier start levels are presented in 2012-13 earnings terms, consistent with the illustrative start level of £144 per week set out in “The single-tier pension: a simple foundation for saving”. Policy and economic assumptions other than the start rate are consistent with those used in the impact assessment accompanying the Pensions Bill 2013. 2. Additional costs have been calculated using on the Departments Pensim2 model. This is a dynamic micro-simulation model developed to inform analysis of likely future trends in pensioner incomes. The information from this model is then calibrated to provide a more accurate estimate of expenditure. 3. The figures above should only be used as an indication. Please also note that the Pensim2 model is based on a sample of the population so the estimates given above are subject to sampling uncertainty. 4. The estimate for part (b) has been estimated by scaling the results from part (a) and as such should be treated with particular caution. Source: Pensim2 modelling and DWP projections of benefit expenditure | |||||
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