HC Deb 30 November 1993 vol 233 cc428-9W
Mr. Bates

To ask the Secretary of State for Social Security how many people paid contributions to a personal pension in the latest tax year for which figures are available; and how the total is divided between(a) the self-employed, (b) employees not contracted out of the state earnings-related pension scheme, (c) employees contracted out of SERPS paying only the minimum needed to contract out and (d) employees contracted out of SERPS paying more than the minimum needed to contract out.

Mr. Hague

The number of people paying contributions to a personal pension scheme during the financial year 1991–92 is in the table.

Million
(a) Self Employed contributors 0.5
(b) Employed contributors (not contracted out of SERPS) 2.2
(c) Employed contributors (Contracted out of SERPS, receiving DSS minimum contributions to thier scheme only) 3.0
(d) Employed contributors (contracted out of SERPS, making personal payments in addition to DSS minimum contributions 2.1
Total 7.8

Notes:

  1. 1. Data derived from Inland Revenue Statistics.
  2. 2. The figure for the number of self-employed contributors is an estimate only.

Mr. Bates

To ask the Secretary of State for Social Security (1) what assessment he has made of the proportion of the money contributed to a typical personal pension at the rebate only level by a man of 30 years which would be absorbed in expenses, charges and commission during the lifetime of the contract up to maturity;

(2) what assessment he has made of the proportion of the money contributed to a typical personal pension at the rebate only level by a man of 30 years which would be absorbed in expenses, charges and commission during the lifetime of the contract if it were terminated after five years;

(3) what assessment he has made of the proportion of the money contributed to a typical personal pension at the rebate only level by a man of 30 years that would be absorbed in expenses, charges and commission in the first year of the contract.

Mr. Hague

Charges associated with personal pensions vary according to the investment base underlying the policy and also between different personal pensions providers. Consideration of the level of charges associated with appropriate personal pensions is a matter for individual investors in their choice of scheme. The DSS has recently published a new guide for potential personal pension investors suggesting questions to ask before deciding on a scheme. The guide advises potential investors to ask about cost and benefits of schemes offered to them and to compare different products available.

Mr. Bates

To ask the Secretary of State for Social Security what proportion of those covered by personal pensions at the rebate only level are entitled only to the minimum benefits needed to contract out of SERPS.

Mr. Hague

All holders of appropriate personal pensions are contracted out of SERPS. The benefits received from a rebate only plan take the form of an annuity purchased with the fund produced by the investment of the rebate together with any incentives, additions and tax relief payable.