Pensioners (Hansard, 7 September 2004)

§ Mr. Tony Clarke
To ask the Secretary of State for Work and Pensions how many pensioners are(a) eligible for and (b) claiming the pension credit in Northampton South. [186464]

§ Malcolm Wicks
Information on the number of people likely to be eligible for Pension Credit is not available at constituency level. However, we estimate that approximately 250,000 households in the East Midlands region, corresponding to approximately 350,000 individuals (rounded to the nearest 50,000), are likely to be eligible for Pension Credit in 2004–05. At the end of July, 3,885 pensioner households in Northampton South, comprising 4,655 individuals (rounded to the nearest five), were in receipt of Pension Credit. The corresponding figures for the East Midlands region at the same date were 185,305 households and 227,800 individuals in receipt of Pension Credit.
1108W

§ Mr. Liddell-Grainger
To ask the Secretary of State for Work and Pensions how many pensioners in Bridgwater(a) are entitled to pension credit, (b) are in receipt of pension credit and (c) were receiving the minimum income guarantee prior to the introduction of pension credit. [186507]

§ Malcolm Wicks
Information on the number of people likely to be eligible for pension credit is not available at constituency level. However, we estimate that approximately 300,000 households in the South West region, corresponding to approximately 400,000 individuals (rounded to the nearest 50,000), are likely to be eligible for pension credit in 2004–05. At the end of July, 214,425 pensioner households in the South West region, comprising approximately 261,835 individuals, were in receipt of pension credit. Information on the number of pension credit and minimum income guarantee (MIG) recipients in Bridgewater is given in the table.

Pension credit and MIG recipients in Bridgewater

Recipients of MIG
3 October 2003
Recipients of
pension credit,
31 July 2004

Households 3,025 4,550

Individuals 3,655 5,655

Notes:

1. Figures are rounded to he nearest five.

2. Individual recipients include a small number of partners under age 60.

3. Pension credit was introduced on 6 October 2003.

§ Mr. Willetts
To ask the Secretary of State for Work and Pensions pursuant to the answer of 3 February 2004,Official Report, columns 833–34W, on pension credit, if he will provide the same breakdown of calls to the pension credit application line for subsequent months. [186852]

§ Malcolm Wicks
The available information is shown in the table.

Calls to pension credit application line, January-July 2004

Calls
received by
application
line
Calls
receiving
engaged
tone or
recorded
message
Calls
answered
within 30
seconds
Average
call
duration
(minutes:
seconds)

January 495,560 120 429,670 08:12

February 433,790 190 372,930 08:34

March 430,070 230 378,440 08:38

April 346,890 13,560 250,970 09:18

May 234,580 20 212,570 08:48

June 315,200 20 266,040 07:20

July 239,990 30 212,390 07:22

Notes:

1. Numbers of calls are rounded to the nearest 10.

2. The number of calls receiving the engaged tone or a recorded message was unusually high in April due to reduced numbers of staff as a result of industrial action. The number of lines feeding into the application line from the network was reduced to avoid people having to wait for a long time for an answer (instead they received a recorded message).

3. The number of calls received is a measure of the total number of calls from customers made to the application line#number 0800 99 1234. The number or calls answered within 30 seconds is a measure of all calls answered in application line sites and excludes any calls abandoned by the customer.

1109W

§ Mr. Willetts
To ask the Secretary of State for Work and Pensions what his latest projections are for expenditure on all benefits to pensioners, broken down by benefit, up to 2053–54(a) as a percentage of GDP and (b) in £billion at 2004–05 prices. [187358]

§ Malcolm Wicks
The information has been placed in the Library.

§ Mr. Willetts
To ask the Secretary of State for Work and Pensions what the average pensioner income was in(a) cash terms and (b) real terms in (i) 2001–02, (ii) 2002–03 and (iii) 2003–04, broken down by (A) state benefits and (B) private savings. [187356]

§ Malcolm Wicks
The information is in the tables. Information for 2003–04 is currently unavailable.

Average pensioner income in cash terms

Income source 2001–02 2002–03

State benefits 136 142

Private saving 105 106

Earnings 24 25

Average pensioner income 268 277

Average pensioner income in real terms

Income source 2001–02 2002–03

State benefits 139 142

Private saving 107 106

Earnings 25 25

Average pensioner income 273 277

Source:

Family Resources Surveys 2001–02 and 2002–03, average incomes rounded to the nearest pound.

Income from state benefits includes: state pensions; income-related benefits; and disability benefits. Income from private saving includes: occupational pensions; personal pensions; and investments.

§ Sandra Gidley
To ask the Secretary of State for Work and Pensions what plans he has to change the state pensions of expatriates living in countries not covered by reciprocal social security agreements with the UK. [186564]

§ Malcolm Wicks
We up-rate state pensions for British citizens living overseas where there is a legal requirement or a reciprocal social security agreement to do so.
However, the up-dating of State Pensions outside this arrangement is the subject of an appeal to the House of Lords from a decision of the Court of Appeal which found in favour of the Government. We will respond accordingly at the hearing which is set for 28 February and 1 March next year.

§ Sandra Gidley
To ask the Secretary of State for Work and Pensions what plans he has #o change the rules allowing for the state pension to be reduced after 52 weeks in hospital. [186565]

§ Malcolm Wicks
We have no plans at present to change these rules.

§ Sandra Gidley
To ask the Secretary of State for Work and Pensions what plans he has to change the level of a surviving partner's entitlement to the state earnings-related pension scheme. [186572]
1110W

§ Malcolm Wicks
We have no plans to alter the current arrangements.

§ Sandra Gidley
To ask the Secretary of State for Work and Pensions what estimate he has made of the cost of increasing the 25p a week age addition to £25. [186573]

§ Malcolm Wicks
The net cost of raising the age addition to £25 per week in 2005—06 is estimated at £2.1 billion.
Notes:
1. Figures are in 2004–05 price terms, rounded to the nearest £100 million.
2. Costs net of income-related benefits (savings credit, guarantee credit, housing benefit and council tax benefit) and income tax are calculated using the Department's policy simulation model for 2005–06.

§ Sandra Gidley
To ask the Secretary of State for Work and Pensions what estimate he has made of the cost over a period of five years of increasing the basic state pension to a level of one-third average male earnings. [186575]

§ Malcolm Wicks
The Information is in the table.

£billion

Gross cost Net cost

2005–06 50.5 32.3

2006–07 52.9 36.2

2007–08 55.6 38.0

2008–09 58.5 39.9

2009–10 61.5 41.9

Notes:

1. Figures are for GB and overseas in 2004–05 price terms, using the Gross Domestic Product deflator index, rounded to the nearest £100 million.

2. Gross basic state pension costs are estimated by the Government Actuary's Department and are consistent with Budget 2004 assumptions and use 2002 based population projections. Basic state pension costs refer to the additional costs after allowing for consequential changes to National Insurance Fund benefits and non-income-related vote benefits.

3. Costs net of income-related benefits (savings credit, guarantee credit, housing benefit and council tax benefit) and income tax are calculated using the Department's policy simulation model for 2005–06 and 2006–07. For illustrative purposes it is assumed that the proportion of savings calculated for the 2006–07 year is constant for subsequent years.

4. Average male earnings are taken from table 3.2 of the Department for Work and Pensions annual abstract of statistics. The April 2003 figure was £525 per week, and this was used to set a category A basic state pension of £175 for the following year. This was then projected forward using Budget 2004 economic assumptions for earnings growth.

§ Sandra Gidley
To ask the Secretary of State for Work and Pensions what estimate he has made of the cost of extending the full basic state pension to all people of pensionable age regardless of national insurance contributions. [186576]
1111W

§ Malcolm Wicks
The information is in the table:

£billion

Gross cost Net cost

2005–06 7.3 5.0

2006–07 8.9 6.0

2007–08 9.9 6.7

2008–09 10.9 7.4

2009–10 11.9 8.1

Notes:

1. Figures are for Great Britain only, in 2004–05 price terms, using the Gross Domestic Products deflator index, rounded to the nearest £100 million.

2. It is assumed that the rules are changed from 2005–06 and that basic state pension is increased in line with prices. It is assumed that all individuals above state pension age (65 for men; 60 for women receive the full category A rate of basic state pension (currently £79.60 per week) regardless of contribution record or marital status.

3. Gross basic state pension costs are estimated by the Government Actuary's Department and are consistent with Budget 2004 assumptions and use 2002-based population projections. Basic state pension costs refer to the additional costs after allowing for consequential changes to National Insurance Fund benefits and non-income-related vote benefits.

4. Costs net of income related benefits (savings credit, guarantee credit, housing benefit and council tax benefit) and income tax are calculated using the Department's policy simulation model for 2005–06 and 2006–07. For illustrative purposes it is assumed that the proportion of savings calculated for the year 2006–07 is constant for subsequent years.

§ Sandra Gidley
To ask the Secretary of State for Work and Pensions what estimate he has made of the cost of raising the basic state pension to the level of the guarantee credit. [186579]

§ Malcolm Wicks
The information is in the following table:

£billion

Gross cost Net cost

2005–06 13.5 7.3

2006–07 15.1 7.7

2007–08 16.4 8.3

2008–09 17.8 9.0

2009–10 19.2 9.8

Notes:

1. Figures are for Great Britain and overseas in 2004–05 price terms, using the Gross Domestic Product deflator index, rounded to the nearest £100 million.

2. It is assumed that the category A rate of basic state pension is increased to the level of the individual guarantee credit in 2005–06 and that both are increased in line with earnings. The category B rate of basic state pension is increased by the same proportion.

3. Gross basic state pension costs are estimated by the Government Actuary's Department and are consistent with Budget 2004 assumptions and use 2002-based population projections. Basic state pension costs refer to the additional costs after allowing for consequential changes to national insurance fund benefits and non-income-related vote benefits.

4. Costs net of income-related benefits (savings credit, guarantee credit, housing benefit and council tax benefit) and income tax are calculated using the Department's policy simulation model for 2005–06 and 2006–07. For illustrative purposes it is assumed that the proportion of savings calculated for the year 2006–07 is constant for subsequent years.

§ Sandra Gidley
To ask the Secretary of State for Work and Pensions what targets he has set for the uptake of benefits by pensioners for the next four years. [186796]
1112W

§ Malcolm Wicks
The Department has two Public Service Agreement (PSA) targets for take up of pension credit by pensionersBy 2006, be paying pension credit to at least 3 million pensioner households; and By 2008, be paying pension credit to at least 3.2 million pensioner households while maintaining a focus on the most disadvantaged by ensuring that at least 2.2 million of the households are in receipt of the guarantee element.
In addition, the 2006 pension credit target is supported by a Service Delivery Agreement (SDA), which says that by 2006, we will be paying the guarantee element of pension credit to at least 2.1 million pensioner households.

§ Mr. Willetts
To ask the Secretary of State for Work and Pensions what his latest estimates are of the cost of contracted-out rebates in each of the past 10 years #nd each of the next 10 years consistent with the latest estimates by the Office of National Statistics of Pension contributions. [187348]

§ Malcolm Wicks
The information is not available in the format requested. The National Insurance contribution (NIC) rebates for Contracted-out Salary Related Schemes are delivered through lower rate NICs rather than as a payment to the pension scheme. Because of this, they would not be included in the data source used to compile the ONS estimates of pension contributions. Such information as is available is set out in the table.

£billions

Past 10 years Next 10 years

Tax year Estimated cost
of rebates
Tax year Estimated cost
of rebates

1994–95 ¹— 2004–05 11.9

1995–96 6.7 2005–06 12.3

1996–97 6.9 2006–07 12.7

1997–98 7.6 2007–08 12.2

1998–99 7.8 2008–09 12.5

1999–2000 8.3 2009–10 12.8

2000–01 9.1 2010–11 13.1

2001–02 9.5 2011–12 13.5

2002–03 11.1 2012–13 13.5

2003–04 11.5 2013–14 13.8

¹Data not available.

Notes:

1. Figures are based on the assumptions used to determine the current national insurance rebates and those for the long-term Public Expenditure Survey undertaken in February 2004.

2. They are for Great Britain only and are calculated on an accruals' basis.

3. The model used by GAD to produce these estimates goes back only to the 1995–96 tax year. They have been unable, therefore, to provide estimates for 1994–95.

Source:

Government Actuary's Department (GAD)

§ Mr. Willetts
To ask the Secretary of State for Work and Pensions if he will provide a breakdown of expenditure on contracted-out rebates for(a) private sector employees and (b) public sector employees in each of the past 10 years; and what the projections are for each of the next 1 years. [187353]

§ Malcolm Wicks
The information is not available.

§ Mr. Willetts
To ask the Secretary of State for Work and Pensions what his latest estimate is of the(a) mean and (b) median cost of the contracted out rebate for 1113W (i) a public sector employee and (ii) a private sector employee in each of the last 10 years; and what the projection is for each of the next 10 years. [187354]

§ Malcolm Wicks
The information is not available.

Pension credit and MIG recipients in Bridgewater
	Recipients of MIG 3 October 2003	Recipients of pension credit, 31 July 2004
Households	3,025	4,550
Individuals	3,655	5,655
Notes:
1. Figures are rounded to he nearest five.
2. Individual recipients include a small number of partners under age 60.
3. Pension credit was introduced on 6 October 2003.

Calls to pension credit application line, January-July 2004
	Calls received by application line	Calls receiving engaged tone or recorded message	Calls answered within 30 seconds	Average call duration (minutes: seconds)
January	495,560	120	429,670	08:12
February	433,790	190	372,930	08:34
March	430,070	230	378,440	08:38
April	346,890	13,560	250,970	09:18
May	234,580	20	212,570	08:48
June	315,200	20	266,040	07:20
July	239,990	30	212,390	07:22
Notes:
1. Numbers of calls are rounded to the nearest 10.
2. The number of calls receiving the engaged tone or a recorded message was unusually high in April due to reduced numbers of staff as a result of industrial action. The number of lines feeding into the application line from the network was reduced to avoid people having to wait for a long time for an answer (instead they received a recorded message).
3. The number of calls received is a measure of the total number of calls from customers made to the application line#number 0800 99 1234. The number or calls answered within 30 seconds is a measure of all calls answered in application line sites and excludes any calls abandoned by the customer.

Average pensioner income in cash terms
Income source	2001–02	2002–03
State benefits	136	142
Private saving	105	106
Earnings	24	25
Average pensioner income	268	277

Average pensioner income in real terms
Income source	2001–02	2002–03
State benefits	139	142
Private saving	107	106
Earnings	25	25
Average pensioner income	273	277
Source:
Family Resources Surveys 2001–02 and 2002–03, average incomes rounded to the nearest pound.

		£billion
	Gross cost	Net cost
2005–06	50.5	32.3
2006–07	52.9	36.2
2007–08	55.6	38.0
2008–09	58.5	39.9
2009–10	61.5	41.9
Notes:
1. Figures are for GB and overseas in 2004–05 price terms, using the Gross Domestic Product deflator index, rounded to the nearest £100 million.
2. Gross basic state pension costs are estimated by the Government Actuary's Department and are consistent with Budget 2004 assumptions and use 2002 based population projections. Basic state pension costs refer to the additional costs after allowing for consequential changes to National Insurance Fund benefits and non-income-related vote benefits.
3. Costs net of income-related benefits (savings credit, guarantee credit, housing benefit and council tax benefit) and income tax are calculated using the Department's policy simulation model for 2005–06 and 2006–07. For illustrative purposes it is assumed that the proportion of savings calculated for the 2006–07 year is constant for subsequent years.
4. Average male earnings are taken from table 3.2 of the Department for Work and Pensions annual abstract of statistics. The April 2003 figure was £525 per week, and this was used to set a category A basic state pension of £175 for the following year. This was then projected forward using Budget 2004 economic assumptions for earnings growth.

			£billions
Past 10 years	Next 10 years
Tax year	Estimated cost of rebates	Tax year	Estimated cost of rebates
1994–95	¹—	2004–05	11.9
1995–96	6.7	2005–06	12.3
1996–97	6.9	2006–07	12.7
1997–98	7.6	2007–08	12.2
1998–99	7.8	2008–09	12.5
1999–2000	8.3	2009–10	12.8
2000–01	9.1	2010–11	13.1
2001–02	9.5	2011–12	13.5
2002–03	11.1	2012–13	13.5
2003–04	11.5	2013–14	13.8
¹Data not available.
Notes:
1. Figures are based on the assumptions used to determine the current national insurance rebates and those for the long-term Public Expenditure Survey undertaken in February 2004.
2. They are for Great Britain only and are calculated on an accruals' basis.
3. The model used by GAD to produce these estimates goes back only to the 1995–96 tax year. They have been unable, therefore, to provide estimates for 1994–95.
Source:
Government Actuary's Department (GAD)