§ Mr. BoswellTo ask the Secretary of State for Work and Pensions if he will make a statement on the(a) cost and (b) effectiveness of the Department's advertising campaign on pension awareness. [31839]
§ Mr. McCartneyThe pensions education campaign promotes the Government's aim to combat poverty and promote security and independence in retirement for future pensioners. The campaign encourages future pensioners to save for their retirement where they can afford to, and provides impartial information on their pension options to help them make informed decisions.
Changing attitudes towards planning for retirement is not a straightforward task and will take time. We are planning to continue pensions education activity.
However, results so far are encouraging. The campaign has provoked almost 900,000 responses and almost 1.2 million information guides have been sent out. Awareness of the campaign is increasing.
The cost for the campaign from April 2000 to December 2001 is approximately £9.3 million. This cost includes campaign development; press, cinema and TV advertising; research and evaluation; the costs of running our information order line; website development; printing leaflets and other campaign materials.
§ Mr. BoswellTo ask the Secretary of State for Work and Pensions what the implied annual uplift is in gross state retirement pensions for qualifying deferment of payment(a) under present arrangements and (b) under future planned modifications of the system; what current annuity rates are; and if he will make a statement. [31305]
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§ Mr. McCartneyEntitlement to Retirement Pension arises when a person attains pensionable age but to be entitled they have to make a claim. They can put off claiming their pension to earn increments. When they claim, each part of the pension is increased by about 7.5 per cent. for each full year of deferral.
Currently the maximum period for deferral is five years but from April 2010 there will be no time limit and the incremental rate will increase to about 10.4 per cent. for each full year.
Annuity rates vary according to the individual's circumstances and are not directly comparable to the increment rates for state pension purposes.
§ Mr. BoswellTo ask the Secretary of State for Work and Pensions what actions he is taking to improve access to financial advice tailored to the needs of individuals contemplating taking out stakeholder pensions. [31840]
§ Mr. McCartneyStakeholder pensions are a straightforward, good value, flexible product which need to adhere to certain minimum standards. These minimum standards mean that for many people less advice is necessary than that needed for personal pensions. For example the minimum standards will mean all stakeholder schemes should offer a good basic deal, and the simplification of tax rules means a single tax regime for all defined contribution pension schemes.
As a part of the minimum standards, all stakeholder pension scheme providers are required to provide, within the charge limit, information about the scheme and additional explanatory material. This will help individuals to decide whether a stakeholder scheme would be a good option for them.
We recognise that some people will need further advice. The Financial Services Authority (FSA), which regulates promotion and advice, has produced 'decision trees' to help individuals work through key questions on whether or not to join a stakeholder scheme, without necessarily requiring full individual advice. It has issued a consultation paper this month explaining how it proposes to keep them accurate and up-to-date.
In some cases there may be a need for individual-specific advice. Scheme providers may give this advice within the charge. It is also open to scheme providers to charge an additional fee for individual advice, or for individuals to seek advice, for a charge, from an independent financial adviser.