State Pension Forecasts (Hansard, 15 April 2002)

§ Lord Woolmer of Leeds
asked Her Majesty's Government:
When they intend to provide United Kingdom citizens with the facility to have an on-line calculation of their state pension forecasts.

§ The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Hollis of Heigham)
My Lords, we are undertaking a programme of work that is designed to improve the frequency and quality of personal information that is available to people about their levels of state and private pensions and their likely retirement income.
We are currently exploring the feasibility of making state pension forecasts available on-line, as my noble friend asked.

§ Lord Woolmer of Leeds
My Lords, I thank my noble friend for that Answer. Can she confirm that the general public will be able to obtain forecasts of their state pension on-line by 2004? Will those forecasts be available in real time, as opposed to the current target of a 40-day turnaround period in responding to inquiries? Do the Government have any plans to require the personal pension providers to provide forecasts on-line by 2004, so that individuals can compare meaningfully state and personal pension provisions in considering their future?

§ Baroness Hollis of Heigham
My Lords, my noble friend asked two questions: one about pension forecasting as such and the other about on-line access of forecasts. Perhaps I may deal with each of those points. In terms of the first—pension forecasting—we are currently rolling out combined pension forecasts of private and retirement pensions. There will be about 15 million statements a year going out by 2005–06. Of course individuals can always request their individual retirement pension forecast.
On the second point—access on-line—one can request the information on-line now. About 2 to 3 per cent of the population do so. But the response comes back by post, and therefore in the normal way as if one had posted the inquiry in. We are conducting a series of feasibility studies over the summer to analyse the cost benefits of on-line forecasting in real time, as my noble friend requested. Perhaps after the summer he might put in a Written Question and I shall tell him where we have got to on the matter.

§ Lord Marsh
My Lords, can the Minister explain how it is possible to have meaningful forecasts of the state pension, which is not an insurance scheme but hypothecated taxation which can be, and frequently is, changed, in terms of any of the benefits, at any time by any government who happen to be in office?

§ Baroness Hollis of Heigham
My Lords, the noble Lord is right, which is why it is almost impossible for us to do forecasting of, say, the pension credit and anything that is a means-tested benefit. The pension statements state—and I have a couple of examples here because I was interested in just those same questions— the current entitlement and, should current assumptions still apply, what that benefit would therefore look like when the individual inquirer is 60 or 65.

§ Lord Addington
My Lords, there is a danger in moving to more on-line services. Does the Minister agree that the current situation of great under-claiming of benefits may well be accentuated by not having face-to-face contact? We will not be able to assume, for instance, that there are questions not being asked. The person will be dependent on knowing which buttons to click on the screen.

§ Baroness Hollis of Heigham
My Lords, I do not think that my noble friend was suggesting that the only way to access this information would be on-line. At the moment, of 620,000 inquiries per year about retirement pension only 17,000 are on-line. Whether or not an inquirer goes on-line has nothing to do with age. But I should expect that, as now, most pensioners will seek that information by telephone of the new and improved pension service.

§ Viscount Goschen
My Lords, is the problem one of security with having on-line information—the Government could note that the banks have addressed on-line banking without having too many security issues—or is it simply one of cost?

§ Baroness Hollis of Heigham
My Lords, I understand that it is a question, first, of funding and, secondly, of the routing device of the government gateways. If the noble Lord wants further information—in other words about the technicalities of the matter—I should be very happy to write to him.

§ Baroness Greengross
My Lords, does the Minister agree that it is absolutely essential that people get updated information about their entitlement over the next few years, especially women because of the change in their age of entitlement and also people who live abroad and who in many countries do not get their pensions uprated? There is a current court case because of that. On-line would be of particular value to them, so that they would be very well informed.

§ Baroness Hollis of Heigham
My Lords, I agree absolutely. The more information people have about 675 their projected pension income, the more we can hope that—resources allowing—they will make greater investment in providing for old age.

§ The Earl of Northesk
My Lords, could the Minister clarify whether there are any data protection implications to the proposed on-line service, particularly in the context of the marriage of an individual's public and private pensions data? I note that the Minister of State, Department for Work and Pensions, Ian McCartney, has stated that data is, provided with [their] consent and that the data shared between the private/public sectors occurs in a controlled environment". But should not there be a tick-box on the application form for individuals to give their explicit consent?

§ Baroness Hollis of Heigham
My Lords, I shall look into the question or whether or not the forms should include the tick-box, but my understanding is that someone gets a combined pension forecast because they ask for it. Therefore, their consent, so to speak, is implied in that action.

§ Lady Saltoun of Abernethy
My Lords, why cannot the articles come by e-mail instead of by post?

§ Baroness Hollis of Heigham
My Lords, that is one of the issues we are looking to develop. At the moment, we do not have the e-mail facility. People inquire by e-mail, by telephone and by post. Whatever way one does it, it takes just as long and the answer comes back by post. That is precisely why I am being nagged by my noble friend—quite correctly.