§ Mr. FieldTo ask the Secretary of State for Social Security what proportion of pensioners will be dependent on means tests, once the Partnership in Pensions is fully operative. [64682]
§ Mr. TimmsThe proposals in the Government's Green Paper "Partnership in Pensions" are designed to ensure that someone with a full working life, or years covered by credits, will receive a pension on retirement above the Minimum Income Guarantee.
The proposals in "Partnership in Pensions" will promote behavioural changes through the spread of good value funded second pensions, improved pensions education, and the greater reward in retirement from moving from benefits to work. It is not possible to forecast the impact of complex behavioural changes over 50 years.
With no allowance for behavioural change it is estimated that by 2050 the number of those receiving Minimum Income Guarantee will fall from approximately 1 in 3 pensioner households (rather than individual pensioners) to approximately 1 in 4 and fall further in later years.
As an illustration of the possible impact of behavioural effects, if all those in work saved an additional 5 per cent., the figure would fall to approximately 1 in 5 in 2050.
§ Mr. WebbTo ask the Secretary of State for Social Security on what take up rate for the stakeholder pension the figures of(a) £0.7 billion lost in lower National Insurance contributions through contracting out and (b) the extra state support of an initial £500 million are based. [65235]
§ Mr. TimmsAs chapter 12 of the Green Paper on pensions "Partnership in Pensions" makes clear, the Department estimate that £0.7 billion would be lost in National Insurance revenue for every million people who contract out of the new State Second Pension scheme. This cost would be recouped in the long term because people would no longer receive the State Second Pension when they retire. The figure of £0.5 billion represents the net National Insurance revenue loss, after allowing for the return of some low earners to State Second Pension.