§ Mr. MaddenTo ask the Secretary Of State for Social Security (1) what saving in public expenditure or other financial benefit accrues to his Department by retirement pensions being paid through automated credit transfer; and what proportion of retirement pensions being paid at present are paid(a) through ACT, (b) through post offices and (c) in other ways;
78W(2) how many letters he has sent in the last year to those about to retire advising them about how their pension may be paid; if all such letters gave information about pension payment through (a) the Post Office, (b) automated credit transfer and (c) other methods; and if he will make a statement.
§ Miss WiddecombeThe administration and payment of retirement pension is a matter for Mr. Michael Bichard, the chief executive of the Benefits Agency. He will write to the hon. Member and a copy will be placed in the Library.
Letter from Mr. M. Bichard to Mr. Max Madden, dated 26 March 1993:
As Chief Executive of the Benefits Agency it is my responsibility to answer questions about relevant operational matters. I am therefore replying to your recent Parliamentary Questions to the Secretary of State for Social Security asking how many letters he has sent in the last year to those about to retire advising them about how their pension may be paid; if all such letters gave information about pension payment through (a) the Post Office, (b) automated credit transfer and (c) other means; and what saving in public expenditure or other financial benefit accrues to his Department by retirement pensions being paid through automated credit transfer: and what proportion of retirement pensions being paid at present are paid through ACT, (b) through post offices and (c) in other ways.Information relating to methods of payment is contained in the retirement pension claim form. 527,383 retirement pension claim packs were issued in the year ending 16 March 1993. Information regarding the various methods of payment is available to all applicants.Savings arise through reduced administration costs. The average administrative cost of paying retirement pensions by ACT is three pence per payment. The alternative methods of paying retirement pensions are order books and payable orders; each payment costs an average of forty four pence and fifty one pence respectively. Additionally, ACT is not as susceptible to fraud in the same way as other methods of payment and this means further savings in public expenditure.At the end of January this year, 69.5 per cent. of pensioners were paid by order book at the Post Office, 26.7 per cent. were paid by ACT, which includes customers using Girobank at the Post Office, and 3.8 per cent. were paid by payable order.I hope that you find this reply helpful. A copy will appear in the Official Report and a copy will also be placed in the Library.