HC Deb 25 March 2004 vol 419 cc1031-2W
Mr. Swayne

To ask the Secretary of State for Work and Pensions if he will make a statement on the Government's target in respect of funded pensions. [161205]

Malcolm Wicks

The Government are committed to continuing their strategy which balances fairness and affordability by targeting state support at those who need it most while encouraging private funded provision for those who can afford to save and rewarding those who have done so.

The Pensions Bill, introduced to the House in February is one part of our programme of reform which bolsters protection for pension scheme members through the introduction of the Pension Protection Fund and The Pensions Regulator. These measures, if approved, will provide people with increased confidence that a pension they have saved will be delivered.

In addition, Simplicity, security and choice: Informed choices for working and saving (Cm 6111) set out the action this Government are taking to empower individuals to take control of their retirement planning.

Mr. Webb

To ask the Secretary of State for Work and Pensions (1) what(a) temporary and (b) permanent changes to the level of written evidence needed to support an application for pension credit have been implemented by his Department; and if he will make a statement; [163292]

(2) if it is his Department's policy to require written evidence of the value of (a) occupational pensions, (b) premium bonds and (c) income tax payments when assessing pension credit applications; and if he will make a statement. [163293]

Malcolm Wicks

Applications for Pension Credit are assessed on the basis that the decision maker must decide, on the balance of probability, whether the information given in the application is correct. As a general rule, written evidence is required of income and of savings and investments above 6,000 (or 10,000, for someone in a care home). Written evidence will normally be required, where relevant, of occupational pensions, premium bonds of 100 or more and income tax deductions.

Our aim is to ensure that Pension Credit is easy to apply for and we continually review our processes to ensure that this is so. We have listened to comments from customers, pension providers and staff and have introduced a number of relatively minor changes to the written evidence which we require. These include, where appropriate, applying an automatic increase to non-state second pensions, where customers are unable to provide details of the rate and date of any proposed increase, inferring the current amount and frequency of non-state second pensions from bank statements and accepting photocopies of documents such as bank statements, savings books and wage slips if the customer is unable or unwilling to provide originals. The changes have been introduce through normal business practices and are subject to ongoing evaluation.

Mr. Webb

To ask the Secretary of State for Work and Pensions if he will estimate the cost to the Exchequer, net of savings in means-tested benefits and additional income tax revenues, of paying a full basic state retirement pension to every individual aged 65 or over, regardless of contribution record, at the rate of the guarantee credit and subsequently indexed to earnings, in each of the next five financial years, assuming that no new rights accrue to the state second pension and that no new rights accrue to the savings credit from the date of implementation of the scheme. [163714]

Malcolm Wicks

The information requested is in the table.

Net cost (£ billion)
2004–05 9.2
2005–06 9.4
2006–07 9.9
2007–08 10.5
2008–09 11.1


  1. 1. Figures are for Great Britain in 2003–04 price terms rounded to the nearest £100 million . It is assumed the change comes into effect from April 2004 and payment is uprated in line with earnings thereafter.
  2. 2. Gross costs are estimated by the Government Actuary's Department and are consistent with Budget 2004 assumptions and use 2002 based population projections.
  3. 3. The costs take into account income related benefit offsets, which are calculated using the DAT policy simulation model and April 2004 benefit rates.
  4. 4. Additional income tax revenue is estimated by the Inland Revenue using 2004 tax rates.
  5. 5. The savings from abolishing the State Second Pension are calculated by the Government Actuary's Department and are consistent with the long term Public Expenditure Survey forecasts. No allowance has been made for changes to contracting out rules.
  6. 6. The savings credit is assumed to be frozen, payments uprated by prices, with no new recipients after 2004. Figures for 2004 and 2005 are based on published medium term forecasts, while those for 2006–07 and beyond are based on the illustrative long-term projections of benefit expenditure underlying Annex A of the Budget report.