HC Deb 15 October 2001 vol 372 c829W
35. Mr. Viggers

To ask the Secretary of State for Work and Pensions for what categories of people it will be advantageous to take out a stakeholder pension. [3610]

Mr. McCartney

The Government have introduced stakeholder pensions as part of our long-term reforms to ensure that everyone has the chance to save for a decent income in retirement. They provide a new pension option for moderate and higher earners who do not have access to a good occupational scheme, or a good group personal pension with an employer contributing.

The suitability of a stakeholder pension for any individual is a matter for them to decide in the light of their particular circumstances. Figures from the insurance industry show that in the first four months since their introduction almost 300,000 people had taken out stakeholder pensions.

Miss Kirkbride

To ask the Secretary of State for Work and Pensions if those who take out a stakeholder pension will be compelled to use their savings to purchase an annuity at the age of 75 years. [3580]

Mr. McCartney

Stakeholder pension funds will be subject to the same rules as other occupational and personal pensions. Where a pension scheme is not able to pay a pension, a fund must be used to buy an annuity by age 75 so as to guarantee a pension income throughout retirement.

Mr. Lazarowicz

To ask the Secretary of State for Work and Pensions if he will take steps to increase the take-up of stakeholder pensions by people on lower incomes. [6655]

Mr. McCartney

Stakeholder pensions are primarily intended for those with moderate and higher earnings who do not have access to a good occupational pension, or a good personal pension with an employer contributing.

From April next year, low earners will benefit through the Second State Pension, which reforms SERPS. Under these reforms, low earners will get at least double what they would have got from SERPS, while carers and disabled people with a broken work record will be entitled to a second-tier pension for the first time.

A good second pension, building on the foundation of the basic State Pension, is the key to having a comfortable retirement.