§ Mr. FieldTo ask the Secretary of State for Social Security what assumptions he has made on the size of the rebates of those contracting out of SERPS for(a) a personal pension and (b) a stakeholder pension over the next five decades. [65171]
§ Mr. TimmsThe assumptions used are those set out in the Government Actuary's report "Occupational and Personal Pension Schemes, Review of Certain Contracting-out Terms" (Cm 3888), presented to Parliament in March 1998.
As explained in the Green Paper on pensions, "Partnership in Pensions", the structure of the contracting out rebates will be reviewed in the light of Stakeholder Pension schemes. For the purposes of the estimates in the Green Paper the level of contracting out rebates for Stakeholder Pension schemes and Personal Pensions were assumed to be the same.
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§ Mr. FieldTo ask the Secretary of State for Social Security if he will estimate how many members of the second state pension scheme will gain more in retirement than they earned in work. [64945]
§ Mr. TimmsInformation is not available in the form requested. Such information as is available is as follows.
An individual who earned £4,250 per year throughout a full working life of 49 years would receive State Pension payments (basic Retirement Pension and the State Second Pension combined, assuming they do not contract-out) approximately equal to their gross earnings in the year before they reach state pension age. Any individual earning below this level in every year (but above the Lower Earnings Limit—£3,328 in 1998–99) would receive State Pension payments higher than their earnings in the year before reaching State pension age.
Note:
Assumed real earnings growth is 1.5 per cent per year.
§ Mr. FieldTo ask the Secretary of State for Social Security if the choice of the single nominated stakeholder pension scheme for whom employers will be compelled to pass employee contributions will be determined by a vote of all employees in the firm wishing to join a stakeholder pension scheme. [64819]
§ Mr. TimmsWe proposed in the Green Paper on pensions, "A new contract for welfare: Partnership in Pensions", that employers should be required to consult their workforce or any organisations representing them before nominating a stakeholder pension scheme. The form this consultation takes will, however, be a matter for individual employers to decide.
§ Mr. FieldTo ask the Secretary of State for Social Security if he will estimate the number of personal pension holders who will transfer to stakeholder pensions; and if he will present this figure as a proportion of all personal pension holders. [64951]
§ Mr. TimmsThe Green Paper on pensions, "A new contract for welfare: Partnership in Pensions", makes clear that the decision to transfer from a personal pension to a stakeholder pension scheme will depend on individual circumstances, including the terms on which a transfer is offered. It is not possible to predict how many personal pension holders will in practice choose to transfer.
§ Mr. FieldTo ask the Secretary of State for Social Security when he expects to bring forward proposals to help pensioners with incomes just above the income support level; and how many pensioners will be helped by such measures. [64947]
§ Mr. TimmsWe said in the pensions Green Paper that we would welcome views on the most cost effective ways of reforming the rules governing the minimum income guarantee so as to better reward those who have saved for their retirement. We hope to bring forward proposals later in this Parliament. Any changes will depend upon the resources available. The numbers of pensioners affected will depend on the measures proposed.
§ Mr. FieldTo ask the Secretary of State for Social Security if he will estimate the minimum payment under the state's second pension once the scheme becomes fully operative. [64944]
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§ Mr. TimmsAn individual who worked for a full working life of 49 years from April 2002, earning above the Lower Earnings Limit (LEL) in every year (£3,328 in 1998/99), would receive a State Second Pension as described on page 45 of "A new contract for welfare: Partnership in Pensions" of approximately £51 per week, in today's earnings.
This is the minimum amount payable to any individual who spends a full working life in employment (earning above the LEL), or who qualifies for caring or disability credits, under the State Second Pension scheme.
Notes:
- 1. Assumed real earnings growth is 1.5 per cent. per year.
- 2. The estimate is given in constant earnings terms i.e. the amount received will be comparable to today's level of average earnings.
§ Mr. FieldTo ask the Secretary of State for Social Security if he will estimate for each of the next five decades the numbers of pensioners who will have incomes above the minimum income guarantee and still remain eligible for income-related benefits. [64950]
§ Mr. TimmsThe information requested is not available.
Projections forward to the year 2050 are subject to a high degree of uncertainty, given the number of assumptions that need to be made in making these estimates. Some of those who will be pensioners in 2050 have yet to begin work, and most are today in their 20s and 30s.
Estimates of the number of pensioners receiving the minimum income guarantee have been made by extrapolating estimates from the PENSIM model, but these can give only a broad indication of the likely order of magnitude of figures so far into the future. The PENSIM projections can be applied only to estimates of pensioners on the minimum income guarantee. Estimates for other income related benefits (such as Housing Benefit and Council Tax Benefit) are not available, as projections for these benefits would require many more assumptions to be made and would be surrounded by an unacceptable level of uncertainty.
§ Mr. FieldTo ask the Secretary of State for Social Security in what ways, other than its link to earnings rather than prices, the new minimum income guarantee will differ from income support for pensioners. [64938]
§ Mr. TimmsWe have made it clear that we want to make delivery of the minimum income guarantee more automatic than has been the case with Income Support. To that end, we plan a number of improvements to the way we deliver services to pensioners. In addition we will examine how we might reform the rules to reward better those who have saved for their retirement.
§ Mr. FieldTo ask the Secretary of State for Social Security when he expects those people whom he has forecast to benefit from the proposed stakeholder pension scheme to receive those benefits. [64850]
§ Mr. TimmsThe Green Paper on pensions; "A new contract for welfare: Partnership in Pensions", indicates that our aim is for the first stakeholder pension schemes to operate from April 2001. People joining a stakeholder pension scheme will begin to receive benefits when they retire.
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§ Mr. FieldTo ask the Secretary of State for Social Security when he expects to bring forward the reforms outlined in paragraph 20 of the fifth Chapter of "A new contract for welfare: Partnership in Pensions. [64946]
§ Mr. TimmsWe have already started to improve services for pensioners and expect to continue to do so during the remainder of this Parliament.
§ Mr. FieldTo ask the Secretary of State for Social Security how many people earning between £9,000 and £20,000 are contributing to a pension above the compulsory minimum; and what is the distribution of these sums measuring the value of pension savings per annum in blocks of £250. [64970]
§ Mr. TimmsInformation is not available in the form requested. Such information as is available is as follows: Data drawn from the 1996 General Household Survey and Spring 1998 Labour Force Survey suggests that there are approximately 10.75 million employees and self-employed people earning between £9,000 and £20,000 per year. Of these, around 7 million are estimated to be making pension savings above the compulsory minimum.