HC Deb 05 December 2001 vol 376 cc431-2W
Mr. Cousins

To ask the Secretary of State for Work and Pensions if he will estimate the changes to cost and coverage of the proposed pension credit if the maximum savings credit were revised to(a) £14.80 single/£18.60 couple, (b) £15.80 single/£19.60 couple and (c) continuing for each £1 up to a maximum of £18.80 for single people and £23.60 for couples. [20297]

Mr. McCartney

Pension credit will ensure that no pensioner need live on an income below a guaranteed minimum level and will provide a reward through the savings credit for those who have made their own provision for their retirement. The formula for the savings credit is set out in "The Pension Credit: the Government's proposals" published on 28 November, copies of which are in the Library. The cost and coverage of the savings credit depends on a number of factors including the range of income rewarded and the percentage of this specified as the savings credit.

Mr. Cousins

To ask the Secretary of State for Work and Pensions if he will estimate the size of a pension fund which would generate an annuity capable of establishing eligibility to an element of pension credit on its introduction in 2003 on a(a) single life flat and (b) single life indexed basis for (i) men and (ii) women, assuming no change in current rates. [20298]

Mr. McCartney

The introduction of pension credit will mean that no pensioner need live on less than £100 a week, or £154 for couples. For the first time we will reward, not penalise, savings to ensure those who have worked hard to save modest amounts will gain from having done so. Even small private pension funds will attract the savings credit.

The information in the table shows the estimated funds required to generate an annuity sufficient to raise people above the point they are eligible for the savings reward element of pension credit.

£
Flat-rate Index-linked
Male 36,000 48,000
FemaleM 39,000 52,000

Notes:

All figures rounded to nearest £1,000.

Figures calculated using annuity rates provided by Annuity Direct. Assumes retirement at age 65.

Assumes entitlement to Basic State Pension only.