HC Deb 19 December 2001 vol 377 cc364-5W
Mr. Hepburn

To ask the Secretary of State for Work and Pensions how his Department plans to encourage private pension provisions. [22664]

Mr. McCartney

This Government are committed to encourage private pension provision —through pension education, making saving pay, providing appropriate savings vehicles and better regulation. This strategy goes hand-in-hand with our broader reform of the pensions landscape with introduction of the state second pension and the launch of the pension service.

Our pension education campaign has been driving home the message that those who can afford to save have an obligation to do so. As part of this, combined pension forecasts will ensure that people have the right information to make well-informed decisions on their retirement income.

The introduction of stakeholder pensions has a significant impact the pensions landscape. Stakeholders are safe, flexible and value for money. For the first time, we have also opened up private pensions to non-earners — giving carers and the disabled a chance to build up a private pension. Since October, all employers with five or more employees must offer access to a stakeholder pension, unless they already offer an appropriate alternative, greatly increasing the coverage of private pension saving.

The Association of British Insurers has calculated that by the end of October nearly 300,000 employers had designated a scheme. The figures also show that some 492,000 policies have been sold in the first seven months since the introduction of stakeholder pensions in April.

We are committed to reforming the regulation of private pension provision. That is why we have commissioned Alan Pickering to lead a review of the regulatory regime, and to report in July with a package of measures for simplification. We have already accepted the recommendations of the Myners Review of institutional investment, are developing proposals to replace the minimum funding requirement with a long-term scheme-specific standard, and have consulted on a package of measures to speed up the winding-up of occupational pension schemes. Better regulation will be better for the individuals —by maintaining their security while removing unnecessary barriers to providing pensions.

From 2003, around half of all pensioners will stand to gain from the new pension credit. For the first time, saving will be rewarded rather than penalised. All single pensioners with weekly incomes of up to £135, and couples with weekly incomes up to £200, will receive a cash top-up. This reward will also be good news for women —around two in three recipients of the credit will be women, as women tend to have smaller pensions than men.

We believe that those who can afford to save for their retirement have an obligation to do so. Our policies will encourage and facilitate that saving, and allow every individual to make informed choices to safeguard their future.