§ Mr. Gordon PrenticeTo ask the Secretary of State for Work and Pensions if he will estimate the total value of benefits unclaimed by pensioners in each year since 1997. [138693]
§ Malcolm WicksThe information requested is not available.
Estimates of take-up of income-related benefits for Great Britain are in the Department's reports titled "Income-Related Benefits—Estimates of Take-Up". Copies of all the reports in the series are in the Library.
§ Mr. WillettsTo ask the Secretary of State for Work and Pensions (1) what estimate he has made of public expenditure on(a) housing benefit for pensioners, (b) council tax benefit for pensioners and (c) pension credit as a percentage of gross domestic product in (i) 1997–98, (ii) 2002–03, (iii) 2010, (iv) 2020, (v) 2030, (vi) 2040, (vii) 2050 and (viii) for other years for which estimates have been made, assuming that the value of the pension credit increases in line with prices and that (A) pensioners' incomes from other sources rise in line with prices and (B) that pensioners' incomes from other sources rise in line with earnings; [134474]
(2) what estimate he has made of public expenditure on (a) housing benefit for pensioners, (b)council tax benefit for pensioners and (c) pension credit as a percentage of gross domestic product in (i) 1997–98, (ii) 2002–03, (iii) 2010, (iv) 2020, (v) 2030, (vi) 2040, (vii) 2050 and (viii) for other years for which estimates have been made, assuming that the value of the pension credit increases in line with earnings and that (A) pensioners' incomes from other sources rise in line with prices and (B) that pensioners' incomes from other sources rise in line with earnings. [134475]
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§ Malcolm WicksExpenditure on income support/ minimum income guarantee, housing benefit and council tax benefit for pensioners as a proportion of gross domestic product in 1997–98 and 2002–03 is shown in Table 1.
Table 1: Expenditure on income support/minimum income guarantee, housing benefit for pensioners and council tax benefit for pensioners as a proportion of gross domestic product Percentage Income support/minimum income guarantee Housing benefit Council tax benefit 1997–98 0.45 0.45 0.15 2002–03 0.40 0.45 0.15 Note
Figures rounded to the nearest 0.05 per cent.
The latest projections of the full cost of pension credit (guarantee credit and savings credit) to 2050 are published on page 148, Annex 3 of the Pensions Green Paper 'Simplicity, security and choice: working and saving for retirement' (cm 5677). Based on a number of assumptions about the future, as set out in Annex 3, this shows that pension credit expenditure could rise to around one and a half per cent. of GDP by 2050.
One of the assumptions used was that on average, income brought to account in the pension credit would increase in line with average earnings.
The Pensioners' Incomes Series 2001–02, based on Family Resources Survey and Family Expenditure Survey data, shows that average pensioner incomes between 1979 and 1996–97 rose by 64 per cent. in real terms, compared to average earnings growth in the whole economy of 36 per cent. in real terms. More recent growth estimates are subject to uncertainty, but the growth in average pensioner incomes between 1994–95 and 2001–02 was around 23 per cent. in real terms, higher than average earnings (up 12 per cent. over the same period).
Robust projections of future spending on pension credit, housing benefit for pensioners and council tax benefit for pensioners, based on alternative assumptions, and in different years, are not available centrally and could be obtained only at disproportionate cost. However Table 2 provides a broad indication, of the likely relative costs in 2050 under alternative scenarios of pension credit uprating and pensioner income growth.
Table 2: Expenditure in 2050 on pension credit, housing benefit for pensioners and council tax benefit for pensioners as a proportion of gross domestic product Percentage Pension credit rises by Pensioner incomes rise by Pension credit Housing benefit Council tax benefit Earnings Prices 3.80 0.60 0.35 Earnings 1.60 0.50 0.20 Prices Prices 0.30 0.55 0.15 Earnings 0.10 0.25 0.05 Note
Figures rounded to the nearest 0.05 per cent.
As explained, given the evidence of past penisoner income growth, the likelihood that those eligible for pension credit in the future will have higher state 493W retirement pension income than previous cohorts, and the growth of non-pension income, such as earnings, this assumption is likely to be unrealistic.
The long-term cost of pension credit, housing benefit and council tax benefit will also depend greatly on the decisions made by future governments in annual uprating statements. This Government are committed to increase the guarantee in line with average earnings for the remainder of this Parliament, ensuring that all pensioners share in rising national prosperity. Following the introduction of pension credit, the Government will be spending an additional £9.2 billion on pensioners in 2004–05 as a result of measures introduced since 1997.