§ Mr. CousinsTo ask the Secretary of State for Social Security if she will estimate the likely yield less charges of an approved personal pension plan based solely on rebated national insurance contributions; and on what assumptions of future growth that estimate is based. [47595]
§ Mr. DenhamOver time, an appropriate personal pension plan based solely on rebated national insurance contributions should yield after charges an amount broadly equivalent to the additional pension derived from SERPS. The reduction in yield allowed for in the rebate structure as a result of charges, based on the assumptions used by the Government Actuary's Department (GAD) in calculating the age-related rebates, is estimated at 1.4 per cent.
§ Mr. CousinsTo ask the Secretary of State for Social Security if he will estimate the percentage of employees in each decile of employees' incomes who do not contribute to personal or occupational pensions. [46491]
§ Mr. DenhamThe information requested is not available in the format requested. Such information as is available is in the table.
109WThe table contains information based on the 1996 General Household Survey (GHS), using deciles of the earnings distribution derived from the GHS sample.
Percentage of employees who are not current members of an occupational or personal pension scheme, by earnings decile Earnings decile Percentage 1 87 2 72 3 63 4 52 5 41 6 29 7 24 8 15 9 10 10 9 Notes:
- 1. Percentages rounded to the nearest 1 per cent.
- 2. Excludes some individuals who did not know if they were members, but thought it possible.
- 3. Includes people who are not current members, but have been members in the past and therefore have some deferred pension rights.
- 4. Information relates to earnings not income.
The pensions review is considering ways of encouraging people to contribute to second pensions.
§ Mr. FlynnTo ask the Secretary of State for Social Security what is the estimated cost of the basic retirement pension in 1999–2000 if uprated in April 1999 in line with(a) prices and (b) average earnings. [45825]
§ Mr. Denham[holding answer 15 June 1998]: The information is not available in the format requested. Such information as is available is set out in the table.
Forecast expenditure on basic Retirement Pension (RP) is £32 billion in 1998/99. The additional cost of uprating by earnings in April 1998 is provided in the table.
The additional cost of uprating retirement pension and linked benefits by earnings in 1998/99 £ million Contributory RP only Contributory RP and linked benefits Gross cost 170 200 Means-tested benefit offset -40 -50 Net cost 120 150 Notes:
110W
- 1. Forecast expenditure on RP has been taken from the 1998 Social Security Departmental Report rounded to the nearest £ billion. Government expenditure plans for future years (1999/2000–2001/2002) will be published after the completion of the Comprehensive Spending Review
- 2. Estimates in the table are rounded to the nearest £10 million. Totals may not agree due to rounding
- 3. National Insurance Fund benefit costs were estimated by the Government Actuary's Department
- 4. Means-tested benefit offsets were calculated using the 1995/96 Family Resources Survey and the May 1996 Income Support Quarterly Statistical Enquiry, both uprated to 1998/99 prices, benefits and earnings levels, and calibrated to the forecasts underlying the 1998 Departmental Report
§ Mr. CousinsTo ask the Secretary of State for Social Security what assessment she has made of the potential impact of rebate-only approved personal pension plans on future means-tested social security entitlements and expenditure. [47730]
§ Mr. DenhamBased on the assumption used by the Government Actuary in "Occupational and Personal Pension SchemesReview of Certain Contracting-out Terms" (Cm3888) an individual investing only the National Insurance Contribution rebate in an appropriate personal pension (APP), would receive a pension broadly equivalent to that which they would otherwise get from the State Earnings Related Pension Scheme (SERPS). The actual amount of pension payable would depend on the costs and performance of each individual pension scheme.
Both the annuity derived from a rebate-only APP and the additional pension derived from SERPS are taken fully into account in claims for means tested benefits. So the numbers of future rebate-only APPs taken out in place of SERPS should have little or no impact on future means tested Social Security entitlements and expenditure.
§ Mr. CousinsTo ask the Secretary of State for Social Security what information she has collated on lapse rates from approved personal plans by(a) provider, (b) region and (c) socio-economic group; and what extra information on lapse rates she has sought in the course of the Pensions Review. [47727]
§ Mr. DenhamThe information is not available in the format requested. As part of the Pensions Review, we have sought information from the Personal Investment Authority (PIA). PIA figures state that for all personal pensions sold through company representatives, approximately one third had lapsed within three years. Approximately one quarter of those sold through independent financial advisers had lapsed within three years.
We are seeking further information on lapse rates for the Pensions Review.
§ Mr. CousinsTo ask the Secretary of State for Social Security how many approved personal pension plans were active in each of the last four years; how many were terminated before retirement; and how many new plans were taken out. [47598]
§ Mr. DenhamThe information is set out in the table.
Thousands 1992–93 1993–94 1994–95 1995–96 Appropriate personal pensions Active Plans1 5,396 5,380 5,376 5,441 New Plans1 383 217 143 145 Terminations before Retirement2 162 231 143 — 11995–96 is the latest year for which the information is available 21994–95 is the latest year for which the information is available Notes:
- 1. The number of terminations before retirement include early retirements and deaths
- 2. Figures are rounded to the nearest thousand
Source:
The Lifetime Labour Market database (LLMDB); a 1 per cent. sample of the National Insurance Recording System taken at February 1997
111W
§ Mr. CousinsTo ask the Secretary of State for Social Security if she will estimate the number of occupational pensions subject to transfer to personal pension plans in the last five years; how many of these transfers were caused by early leavers transfers; and whether the past practices of early leaver benefits will be covered in the Pensions Review. [47593]
§ Mr. DenhamThe information is not available in the format requested. Such information as is available relates to contracted-out schemes and is set out in the table.
The Report of the Pension Provision Group covered some aspects of early leaver benefits and we are considering this Report as part of our Pensions Review. We will publish a Green Paper later this year.
Transfers of pension rights from contracted-out occupational pension schemes to appropriate personal pension schemes1 Year2 Number of Transfers3 1993–1994 37,000 1994–1995 22,000 1995–1996 12,000 1996–1997 9,000 1997–1998 6,000 Total number of transfers in 5 years 85,000 1A personal pension scheme is appropriate if it has been given an appropriate scheme certificate by the Secretary of State allowing its members to contract-out of the State Earnings Related Pension Scheme (SERPS) 2 Each period of a year is the financial year 6 April to 5 April 3 Figures are rounded to the nearest 1,000, therefore, the total is not their sum Source:
Contracted Out Employment Group
§ Mr. CousinsTo ask the Secretary of State for Social Security to what extent present rules for means-tested benefits include paid-up or lapsed personal plans in the calculation of savings; and what plans she has to review these rules. [47731]
§ Mr. Keith BradleyThe value of funds held in a personal pension scheme are fully disregarded, as is the value of the right to receive a personal pension at a future date. There are no plans to review the disregard.
§ Mr. CousinsTo ask the Secretary of State for Social Security if she will estimate the total number of active approved personal plans which are financed solely by rebated national insurance contributions in each of the last four years. [47594]
§ Mr. DenhamThe information is set out in the table.
Number of personal pension arrangements financed by national insurance rebates only Year Number 1993–94 2,900,000 1994–95 3,070,000 1995–96 3,020,000 1996–97 3,160,000 Note:
1996–97 is the latest year for which the information is available
Source:
Inland Revenue Statistics 1997