HC Deb 16 May 1994 vol 243 cc539-40
6. Mr. Thomason

To ask the Secretary of State for Social Security what proportion of pensioners currently have an occupational pension; and how many had one in 1979.

Mr. Hague

In 1990–91, the latest year for which figures are available, an estimated 61 per cent. of all pensioners had an occupational pension. The equivalent figure for 1979 was 43 per cent.

Mr. Thomason

I am grateful to my hon. Friend for that answer. Can he confirm that the figures for the more recently retired are even better than those that he has just cited? About 70 per cent. of those who have recently retired have income from occupational pension schemes. Can he confirm that in 1979 the figure was under 50 per cent?

Mr. Hague

My hon. Friend is right to say that almost 70 per cent. of recently retired pensioners have income from an occupational pension scheme. That figure was very substantially lower in 1979—just over half the total. Apart from that, 76 per cent. of pensioners now have income from investments and savings, which again is a considerable increase on the 62 per cent. equivalent figure in 1979. Those factors have all contributed to the rise in pensioners' living standards.

Mr. Olner

Is the Minister aware that many men and women find that their occupational pensions are not realised to their fullest extent because they are made redundant at an early stage? Surely the Minister should be examining the phenomenon. He should have it well in mind also that many people have put a misplaced trust in companies offering personal pensions, thinking that they would be given a reasonable return for their money.

Mr. Hague

The security of personal pensions is being dealt with by the Securities and Investments Board. The board has already published a series of measures that are to be taken. We await its further consideration.

During the 1980s, the Government introduced considerable improvements to the indexation of occupational pensions for those employees who leave schemes early before their normal retirement age. That has been of great assistance to many hundreds of thousands of people.

Mr. Alan Howarth

While I welcome the spread of occupational pensions in many parts of the population, I remind my hon. Friend that only about 40 per cent. of recipients of invalidity benefit are also in receipt of an occupational pension. Will he ensure that restrictions on benefit under the new incapacity benefit do not lead to hardship among those who are genuinely unfit to work and do not have access to other resources such as occupational pensions, permanent health insurance or income from savings?

Mr. Hague

I know that my hon. Friend pursued that point during the passage of the Social Security (Incapacity for Work) Bill and that my right hon. Friends have taken note of that. The introduction of an objective medical test is intended to ensure that there is no hardship and that help is directed at those who most need it.

Mr. Corbyn

Does the Minister recognise that the Government's reliance on the large proportion of pensioners having either occupational or private contributory pensions masks the serious problem of poverty among older women pensioners who have to rely entirely on the state pension plus housing benefit to survive? Their poverty is becoming worse, as is the humiliation of their lives. The Government's refusal to uprate the pension in line with average earnings means that such pensioners' living standards are deteriorating year on year. What does the Minister plan to do about these people?

Mr. Hague

It is because older pensioners in particular have not had the benefit of occupational pensions, investments and savings to the same extent as younger pensioners that, since 1988, the Government have targeted additional resources totalling £1.2 billion in the form of additional benefits on the poorer and the older pensioners. That is our response to the problem, and it will continue.

Mr. Willetts

Does my hon. Friend agree that as the labour market becomes more flexible it makes more sense for more and more people to have personal pensions, as the best way of saving for their retirement?

Mr. Hague

The availability of personal pensions, as my hon. Friend rightly suggests, is extremely important in a more flexible and mobile labour force. The availability of these pensions has meant that people are now saving for their retirement some billions of pounds that were not being saved before. These moneys will provide additional income in their retirement.