§ 13. Dr. Vincent Cable (Twickenham)If he will reduce the imputed return on savings in the calculation of benefits entitlement. [138646]
§ The Parliamentary Under-Secretary of State for Work and Pensions (Mr. Chris Pond)We have already done so in respect of pension credit, for which the tariff income on savings is half that for the minimum income guarantee, which it replaced. We have no plans to change the tariff income on other benefits, but we keep all income and capital rules under review.
§ Dr. CableI accept the Minister's reply, in that the Government have indeed reduced the assumed rate of annual return from the ludicrous level of 20 per cent. However, does the Minister accept the criticisms of the pensions experts who came before the Treasury Committee last week, who said that the current assumed rate of 10 per cent. on savings over £6,000 was totally unrealistic, because no bank offers anything remotely like that, and was a significant disincentive to saving?
§ Mr. PondLess than 5 per cent. of customers are assessed as having any tariff income at all, and we must bear in mind that the first tranche of savings is disregarded altogether. The tariff income rules allow people to continue to receive income-based benefit even if they have some savings, rather than their being disqualified outright. I think that the hon. Gentleman would agree that it would be wrong to disqualify people totally simply because they had some savings. The tariff income rules are a way of phasing out the entitlement to benefit, without pushing people over a cliff edge, but we keep all the rules under review, and will continue to do so.