State Retirement Pensions: Uprating

(asked on 4th September 2023) - View Source

Question to the Department for Work and Pensions:

To ask His Majesty's Government, further to the Department for Work and Pension's Estimated costs of uprating State Pension in frozen rate countries: 2024 to 2028, published on 19 July, whether they can publish the background workings to the estimated costs of uprating the State Pension in frozen rate countries.


Answered by
Viscount Younger of Leckie Portrait
Viscount Younger of Leckie
Parliamentary Under-Secretary (Department for Work and Pensions)
This question was answered on 14th September 2023

The methodology is relatively straight forward and is contained within the publication but quoted below for ease:

Estimates of projected costs

1. The estimate is based on the latest available data (March 2022) from the 5% extract of DWP’s State Pension administrative data, the Quarterly Statistical Enquiry (QSE).

2. The QSE is used to estimate the volume of individuals in frozen rate countries and their State Pension amounts.

3. The State Pension amount, for all current and future recipients, is uprated (using the relevant indices) to the level they would have been if they had never been frozen.

4. To estimate the costs for subsequent financial years we make adjustments to the underlying caseload and associated costs by:

  • applying mortality rates to existing cases, based on age and gender;
  • adding forecasts of future State Pension claims, which are based on historical trends and expected changes in the population, and are adjusted for mortality; and
  • uprating State Pension amounts using economic assumptions from the Office for Budget Responsibility at Spring Budget 2023.

5. The total cost for a given financial year is the difference between the uprated State Pension amounts and the frozen State Pension amounts.

As with all estimates of projected costs, there is a degree of uncertainty, however where possible we have taken steps to try to minimise any significant measurement error.

Links for the relevant data sources publicly available are:

- OBR economic assumption for the relevant uprating indices here

- Mortality projections here

- Benefit expenditure and caseload tables (table State_Pension) here

- Stat-Xplore SP outturn data from Nov 20 here

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