§ Mr. FieldTo ask the Secretary of State for Social Security if he will estimate the proportion of those whose earnings will move(a) below and (b) above the £9,000 threshold to stakeholder pension during the first decade of the scheme's life. [65173]
§ Mr. FieldTo ask the Secretary of State for Social Security if he will list those people who suggested abolition of the current pension system referred to in paragraph 36 of the summary of "A New Contract for Welfare: Partnership in Pensions". [64849]
§ Mr. TimmsOf the more than 2,000 submissions to the Pensions Review, a small number suggested abolition of the current pension system referred to in paragraph 36 of the summary of the Green Paper, "A New Contract for Welfare: Partnership in Pensions".
§ Mr. FieldTo ask the Secretary of State for Social Security what plans he has to link the £9,000 entrance into stakeholder pensions to(a) earnings and (b) prices. [65174]
§ Mr. TimmsAs explained in the Green Paper on pensions "A New Contract for Welfare: Partnership in Pensions" the new thresholds of £9,000 and £18,500 for State Second Pension will be uprated in line with average earnings.
§ Mr. FieldTo ask the Secretary of State for Social Security if he will publish the data supporting the statement in paragraph 7 of the third chapter of "A New Contract for Welfare: Partnership in Pensions" that over a whole working life more people are experiencing periods on both lower and higher income. [64943]
§ Mr. TimmsThe increased likelihood of income fluctuations is due to the changes in the labour market and modern society discussed in paragraph 7 of the third chapter of "A New Contract for Welfare: Partnership in Pensions". Increases in the numbers of self-employed, part-time and temporary workers mean that people's incomes from earnings are more likely to be unevenly distributed over time, making it more difficult for people to build up pension rights.
The distribution of income has also widened considerably since 1979. This is partly due to an increase in the number of people living in workless households. This trend could reflect increased fluctuations in people's incomes if it is the result of people experiencing more periods of worklessness over the life cycle.
218W
§ Mr. FieldTo ask the Secretary of State for Social Security when he expects to be able to bring forward proposals to assist those workers earning below the lower earnings level who are not covered by the reforms in "A New Contract for Welfare: Partnership in Pensions". [64935]
§ Mr. TimmsOur objectives are to provide security for those who cannot provide for themselves and to make it easier for people who can save, to do so. Currently there are many people who cannot provide for themselves in retirement because they are outside the labour market or because their earnings are low as a consequence of the number of hours they work or their hourly rates of pay. The introduction of the national minimum wage will ensure that those working substantial numbers of hours are paid at levels which mean they are able to build up entitlement to a basic pension.
We recognise that there remains a group of people, mainly women, who are active in the labour market but whose access to contributory pensions is affected by the fact that they work part-time on low earnings for long periods. As signalled in the Green Paper "A New Contract for Welfare: Partnership in Pensions", we will be considering whether more needs to be done to assist this group within the National Insurance scheme. Those pensioners who are not able to build up an adequate pension during their working lifetime will be able to receive the minimum income guarantee.
§ Mr. FieldTo ask the Secretary of State for Social Security if he will estimate the number of private pensions which give poor value. [64941]
§ Mr. TimmsThe Green Paper "A New Contract for Welfare: Partnership in Pensions" indicates that some types of personal pensions can be unsuitable for people who have low or intermittent earnings, or who cannot maintain the regular contributions required. It is not possible to quantify the number of pensions which provide poor value, since this depends both on the terms of individual arrangements and on the subsequent circumstances of those who take them out. This is why we have brought forward proposals for new stakeholder pension schemes.
§ Mr. FieldTo ask the Secretary of State for Social Security (1) if he will estimate how many(a) carers and (b) people with disabilities will (i) no longer be and (ii) remain dependent on means-tested benefits in retirement once the proposals in "A New Contract for Welfare: Partnership in Pensions" are fully operative; [64818]
(2) what will be, in each of the next five decades, the proportion of (a) pension payments, (b) national insurance rebates and (c) tax benefits going to each decile group of the population (i) under the current arrangement and (ii) as a result of the reforms advocated in "A New Contract for Welfare: Partnership in Pensions". [64942]
219W
§ Mr. FieldTo ask the Secretary of State for Social Security what proportion of pensioners retiring in each of the next five decades will be(a) totally dependent on means-tested benefits and (b) dependent upon means-tested benefits for part of their pensioner lives, if the proposals in "A New Contract for Welfare: Partnership in Pensions" are not enacted. [64977]
§ 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 only give a broad indication of the likely order of magnitude of figures so far into the future. The PENSIM projections can only be applied to estimates of pensioners on the Minimum Income Guarantee at a particular point in time.
Estimates suggest that approximately 1.5 million pensioners (around 1 in 5, or 20 per cent.) will receive payments from the Minimum Income Guarantee when it is introduced in April 1999. On the basis of unchanged policies, estimates suggest that approximately 3.5 million pensioners (1 in 3) in 2050 could rely on the Minimum Income Guarantee. Even if no behaviour changes are assumed, the new insurance contract for pensions will mean that these estimates are reduced to approximately 2.5 million pensioners (1 in 4) receiving income from the Minimum Income Guarantee in 2050, and a lower proportion in years after 2050.
Estimates for other income related benefits (such as Housing Benefit and Council Tax Benefit), or of changes in the circumstances of individuals over time, are not available, as these projections 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 if he will estimate the number and percentage of pensioners eligible for the Government's new income guarantee for all pensioners(a) at the inception of the scheme and (b) at 10 yearly intervals for the following five decades. [64939]
§ Mr. TimmsThe information is not available in the form requested.
The proposals in the Government's Green Paper "A New Contract for Welfare: Partnerships in Pensions" are designed to ensure that someone with a full working life, or years covered by credits, will receive a pension on 220W retirement above the Minimum Income Guarantee. The impact of the new State Second pension in 2050, once individuals have experienced a full working lifetime under the new scheme is shown in the table accompanying paragraph 14 of chapter 6 of the Green Paper.
The precise impact of the proposals will, therefore, depend on a variety of factors, including employment records and additional voluntary savings. The proposals in "Partnership in Pensions" will promote behavioural changes through the spread of good value funded second pensions, improved pensions education, and the greater reward in retirement form moving from benefits to work.
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 have been made by extrapolating projections from the PENSIM model, but these can only give a broad indication of the likely order of magnitude of figures so far into the future.
Estimates suggest that approximately 1.5 million pensioners (around 1 in 5, or 20 per cent.) will receive payments from the Minimum Income Guarantee when it is introduced in April 1999. On the basis of unchanged policies, estimates suggest that approximately 3.5 million pensioners (1 in 3) in 2050 could rely on the Minimum Income Guarantee. Even if no behavioural changes are assumed, the new insurance contract for pensions will mean that these estimates are reduced to approximately 2.5 million pensioners (1 in 4) receiving income from the Minimum Income Guarantee in 2050, and a lower proportion in years after 2050.
As an illustration of the possible impact of the behavioural effects of the proposals in "Partnership in Pensions", if all those in work saved an additional 5 per cent., the figure would fall to approximately 2 million in 2050.
Notes:
- 1. Pensioners are defined as pensioner benefit units at and above State pension age.
- 2. The figures and proportions given for the Minimum Income Guarantee are of pensioner benefit units (at least one of State pension age or above), rather than individual pensioners.