HC Deb 07 February 2000 vol 344 cc5-7
3. Mr. Jim Cunningham (Coventry, South)

What steps he is taking to improve the public's knowledge of pensions and saving for retirement. [107188]

The Minister of State, Department of Social Security (Mr. Jeff Rooker)

We shall be introducing new pension forecasts giving both state and private pension details. For the first time, individuals who work will have a clear statement of their current and projected pension rights. We hope to be able to provide that information for everyone by 2002, and this year it has been piloted in several large companies.

We have already greatly improved the general pension information available with award-winning pension leaflets, based on the "Monopoly" game, which are used at exhibitions and in advertisements in the press. We shall continue to do all we can to improve people's knowledge of pensions and to encourage individuals to make adequate provision for their retirement.

Mr. Cunningham

Will my right hon. Friend ensure that young people, who are often unaware that it is important for them to join a pension scheme, do join a pension scheme? What will he do to encourage them to do so? Is he aware that many old-age pensioners are suffering because of the mis-selling of endowment policies under the previous Government?

Mr. Rooker

I agree entirely with my hon. Friend. The whole House will agree that it is not easy to encourage young people to think about pensions. However, when from 2002 everybody gets an annual statement of their pension entitlements—similar to a P60—and they see what is being accrued in their state, company, occupational or stakeholder pension, they will start to ask questions in a way that they did not before. It is likely that more young people will start to make better provision for their pension arrangements.

Mr. Simon Burns (West Chelmsford)

Obviously, the more information people have about their pensions, the better. In that context, all pensioners know that they will get a measly 75p increase in April. How does that square with the fact that the council tax in Chelmsford will increase by £1.31 a week, which will mean a 56p a week loss for pensioners before taking into account the increase in the rate of inflation since September, the increase in rents way above the rate of inflation and other income problems that pensioners face? The Chancellor seems to have about £7 billion to £8 billion spare next year, so why cannot the pensioners have a decent increase and share in the nation's prosperity?

Mr. Rooker

The hon. Gentleman ignores the fact that the 75p increase is tied to someone living on the basic state pension of £66.75. Average pensioner net incomes in 1997–98 for single people were £132, and for couples £252. To compare the 75p increase with the council tax increase is totally and utterly misleading.

Mr. Andrew Miller (Ellesmere Port and Neston)

As well as improving the public's knowledge of pensions, will my right hon. Friend ensure that pension advisers who advise members of the public and firms are also brought up to speed? Will he carefully consider the ombudsman's decisions on the collapse of H. H. Robertson's, a firm in my constituency, when they are published and ensure that lessons about the weaknesses in the current legislation are learned and that pension advisers take their share of responsibility for the collapse?

Mr. Rooker

I do not know the particular circumstances of that firm, but any report from the pensions ombudsman that highlights a loophole in the protection of pensioners, future and present, will be examined seriously by the Government.

Mr. Archy Kirkwood (Roxburgh and Berwickshire)

Many people will get a shock when they receive their personal statements and realise what they will be entitled to when they retire. Will the Minister use the opportunity afforded by the statements to give an up-to-date running total of what is in the national insurance fund? Will he confirm that, if the statements were sent out this week, the recipients would learn that the fund had a £16,000 million surplus, but many of them will receive an increase of only 75p in April?

Mr. Rooker

If we did that, we would have to send out a volume the size of a telephone directory explaining that the position is not as simple as that—as the hon. Gentleman well knows. The national insurance fund can be in surplus at times because its level depends on the number of people who claim contributory benefits. The hon. Gentleman, in his position as Chairman of the Social Security Committee, should not give such misleading information in his questions.

Mrs. Jacqui Lait (Beckenham)

Will the Minister confirm that the information that he has just promised for 2002 was indeed the information that the Green Paper on pensions promised for April 1999? Will he confirm that the delay is because of the decision about widows' inheritance of the state earnings-related pension scheme? Are we to conclude that there will not be a decision until about 2002, or can we expect it to be earlier?

Mr. Rooker

I think that the hon. Lady has misunderstood what I said. We expect to get the pension forecasting service to everybody in the system up and running by 2002, perhaps even by late 2001. It has been piloted with tens of thousands of employees in seven or eight large companies this year. Indeed, a pilot of the pilot has already started. This scheme is new—it has never before been attempted to combine state and private pension forecasts for everyone on an annual basis.