§ Mr. WebbTo ask the Secretary of State for Social Security if he will estimate the amount of money which would need to be credited to a stakeholder pension in a given year for a new entrant to the labour market to buy on retirement a pension equivalent to the value of the credit to the state second pension which would be given to someone with caring responsibilities during that year. [91136]
§ Mr. TimmsA carer who received a full year of credits for the State Second Pension in 2002 (the first year in which credits for the State Second Pension are likely to be available) would accrue rights to a pension of about £1 per week in today's prices, which rises in line with average earnings over the working life. This real rise in the value of the pension over the working life means that the cash value of the future pension accrued in 2002 will rise to approximately £2 per week in 1999 prices by the time of retirement (2051).
The amount a 16-year-old female entrant to the labour market in the same year would need to contribute to a stakeholder pension scheme to accrue the same pension in 2051 is £402 in 2002 (or about £8 per week) and about £6 per week net of tax relief at the basicrate.
Depending on earnings, part of this contribution could be made up of the National Insurance rebate if she was contracted-out of the State Second Pension.
The precise amounts required in a stakeholder pension to match the value of State Second Pension credits vary depending on the year in which the contribution is made and on the gender of the contributor.
Notes:
1. All figures are rounded to the nearest pound.
Month Claims not processed within 20 days Claims not processed within 60 days Total claims processed within month Total claims received within month June 1998 16,007 3,338 49,068 55,605 July 1998 11,607 2,989 40,412 50,176 August 1998 9,305 2,589 33,421 42,988 September 1998 14,227 6,208 42,269 50,224 October 1998 25,374 7,572 62,646 51,318 November 1998 12,821 3,867 50,460 48,612 December 1998 6,536 1,894 35,880 36,672 January 1999 1- 1- 41,120 58,427 February 1999 10,661 2,316 45,725 50,980 March 1999 14,537 2,763 52,823 62,949 April 1999 2- 2,394 46,682 54,025 May 1999 2- 2,454 46,152 49,308 1 Figures not available 2 No longer maintained As mentioned in the previous reply, in the 10 months up to 31 March 1999 the Benefits Agency target of processing 65% of its claims within 20 days was met in all but one of the months. Since April, the target has been 95% processed in 60 days and for April and May the percentages achieved were 94.9 and 94.7 respectively.
Information on the average time taken to process claims is taken across all the claims processed including those processed over 60 days. All claims are recorded on the Pensions Computer System and in respect of those not processed after 60 days, the system notifies the local Benefits Agency office management on a monthly basis to allow progress on the claims to be monitored. Management is also informed of the longest case outstanding but the cost in establishing
444W2. Figures are expressed in 1999 prices.
3. The annuity rate used is GAD's projected female annuity rate for 2050.
4. The real rate of return on Stakeholder funds is assumed to be 4 per cent.
5. An annual charge of 1 per cent. on the accumulated stakeholder fund is assumed.
6. Contributions are assumed to be gross; they would attract tax relief of 23 per cent.
7. The State Second Pension entitlement is calculated on the basis that a carer will gain a pension equivalent to that which would be accrued on £180 per week (in 1999 earnings terms) over the year.
§ Mr. Laurence RobertsonTo ask the Secretary of State for Social Security, pursuant to his answer of 2 July 1999,Official Report, column 307, on pensions, how many claims for pension payments were not processed (a) within 20 days and (b) within 60 days and, of those not processed within 60 days, what was (i) the average time and (ii) the longest time, for processing in the 12 months up to 31 May. [91482]
§ Mr. TimmsThe administration of Retirement Pensions is a matter for Peter Mathison, the Chief Executive of the Benefits Agency. He will write to the hon. Member.
Letter from Mr. Peter Mathison to Mr. Laurence Robertson, dated 16 July 1999:
The Secretary of State has asked me to reply to your recent question, pursuant to his answer of 2nd July on pensions, how many claims for pension payments were not processed (a) within 20 days and (b) within 60 days and, of those not processed within 60 days, what was (i) the average time and (ii) the longest time, for processing in the 12 months up to 31st May.The table below sets out the number of Retirement Pension claims which, in the 12 months ending May 1999, had not been processed within 20 days and 60 days of their receipt: which is the longest outstanding case across the network of offices in the 12 months ending May 1999 is disproportionate to the effort involved.I hope this is helpful.