NI surplus 'can fund pension rise'
Updated on 22 February 2008
The UK's biggest pensioners group has called on the Government to use the growing surplus in the National Insurance fund to increase the basic state pension.
The National Pensioners Convention (NPC) said figures from the Government Actuary's Department showed the surplus in the National Insurance fund has been rising by more than two and a quarter times the increase in expenditure.
It said the surplus had now reached a record £38 billion, and it is expected to hit £114 billion in five years - the equivalent of 136% of the level of expenditure.
The group is calling on the Government to use the money to increase the basic state pension above the official poverty level of £134 a week.
Joe Harris, general secretary of the NPC, said: "These latest figures show that every month, employers and employees are paying 12.8% and 11% of salaries respectively in National Insurance contributions - but that money is not being used to pay higher pensions.
"Instead, the Government is using that money for purposes for which it was not intended. Today's pensioners are effectively subsidising the economy by having their state pensions kept well below the official poverty level.
"After 100 years of the state pension, pensioners deserve more than the pitiful £87.30 a week they currently receive, and the massive surplus in the National Insurance fund should be used to give everyone a pension above the official poverty level of £134 a week."
He said the Government figures showed the money was there to end the need for means-testing, restore the link between pensions and earnings now and give real financial security to all 11 million pensioners.
A Department for Work and Pensions spokesman said: "It is estimated that the introduction of the NPC proposal would cost £20 billion to £30 billion extra per year by 2015. This would knock out the NI fund surplus in just over three years and contribution rates would have to increase to compensate.
"The additional cost of the NPC proposals is estimated to grow to £80bn by 2050 - equivalent to an extra 9p on income tax."
These news feeds are provided by an independent third party and Channel 4 is not responsible or liable to you for the same.
