§ 21. Mr. DjanoglyTo ask the Secretary of State for Work and Pensions if he will make a statement on the cost projections for the pension credit. [102965]
§ Mr. McCartneyThis Government will be spending an additional £1 billion in 2003–04 as a result of the introduction of pension credit, rising to an additional £2 billion in 2004–05. Total spending on pension credit in 2004–05 is projected to be around £6 billion.
597WFrom October 2003 pension credit will provide a guaranteed minimum income for those aged 60 and over. It will ensure pensioners with modest savings no longer lose a pound of pensions or other savings they have built up.
It has been designed so that customers will find it easy to apply for, it will be simpler, fairer, less intrusive and bureaucratic. The weekly means test will be abolished so for those people over 65 they will need only to report major life events, with the majority of people not having to notify changes in their financial circumstances for a period of five years.
This Government is committed to tackling pensioner poverty.
From April 2003, no single pensioner will have to get by on an income of less than £102.10 a week under the minimum income guarantee (£155.80 for couples).
Nearly two million people are benefiting from minimum income guarantee and the take up campaign has put an average £20 a week extra in the pockets of 149,000 people who would not have received it otherwise. In the hon. Member's constituency around 1,500 people receive this entitlement.
From April 2003, basic State Pension will be £77.45 for singles (£123.80 for couples). An increase of £100 a year for single people and £160 a year for couples. In future years the basic State Pension will increase by 2.5 per cent. or the level of the September RPI, whichever is higher.
Last winter (2001–02) over eight million households benefited from the £200 Winter Fuel Payment, worth around £4 a week. It will continue at this rate for the rest of this Parliament. Some 18,305 people in the Huntingdon constituency received a Winter Fuel Payment for last winter.
All in all, we will be spending around £7.5 billion extra on pensioners in 2003–04 as a result of the measures introduced since 1997. This includes around £3.5 billion that is being spent on the poorest third of pensioners.
§ Andy BurnhamTo ask the Secretary of State for Work and Pensions what assessment he has made of the impact of the pension credit on the poorest pensioners.[102966]
§ Mr. McCartneyOur priority has always been to focus help on those who need it most, that is why we introduced the Minimum Income Guarantee. As a result, nearly two million people are benefiting from Minimum Income Guarantee and the take up campaign has put an average £20 a week extra in the pockets of 149,000 people who would not have received it otherwise. In the hon. Member's constituency around 3,400 people are in receipt of the Minimum Income Guarantee.
WE are now going a step further and introducing Pension Credit which will reward not penalise saving. The poorest third of pensioners will be at least £1,500 a year better off than in 1997 due to this Government's tax and benefit changes.
598WAround half of all pensioner households will be eligible for Pension Credit and, on average, stand to gain around £400 a year. Pension Credit will be simple to apply for, and signals the end of the intrusive weekly means test that pensioners find so demeaning.
Pension credit will provide a guaranteed minimum income for those aged 60 and over. No single pensioner will have to get by on an income of less than £102.10 a week (£155.80 for couples).
It will also ensure pensioners, aged 65 and over with modest savings, no longer lose a pound of pensions or other savings they have built up. Pensioners will receive 60p for every pound of income they have between the level of the savings credit threshold and the guarantee level potentially giving them a maximum reward of £14.79 (£19.20 for couples). Above this level the savings credit will reduce progressively, with those on incomes over £139 for single pensioners (£203 for couples) ceasing to be entitled. (These limits will be higher for those with special needs or extra payments).
§ Mr. FlightTo ask the Secretary of State for Work and Pensions what the projected cost is per annum of the pension credit. [102591]
§ Mr. McCartneyI refer the hon. Member to the written answer I gave the hon. Member for Yeovil, Mr. David Laws, on 24 February 2003,Official Report. column 189W.