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SOCIAL SECURITY

Disability Living Allowance

Dr. Cable: To ask the Secretary of State for Social Security what procedures she has introduced to conduct audits of the disability living allowance reviews and appeals in respect of particular medical examiners. [46292]

Mr. Denham: All the doctors who complete medical examinations for the Benefits Agency Medical Services in connection with Disability Living Allowance reviews have their work subjected to regular audit. Random samples of statistically significant numbers of cases from the work of all doctors are examined for the quality of the history, examination findings and the opinions given, according to nationally determined standards. When the quality of the work of an individual doctor is questioned this will be subject to targeted audit and remedial action taken to remedy any deficiencies identified. Similarly, the work of newly appointed doctors is subject to targeted audit until the auditors are satisfied with the quality of work being produced.

Pensions

Mr. Cousins: To ask the Secretary of State for Social Security if she will estimate the likely yield less charges of an approved personal pension plan based solely on rebated national insurance contributions; and on what assumptions of future growth that estimate is based. [47595]

Mr. Denham: Over time, an appropriate personal pension plan based solely on rebated national insurance contributions should yield after charges an amount broadly equivalent to the additional pension derived from SERPS. The reduction in yield allowed for in the rebate structure as a result of charges, based on the assumptions used by the Government Actuary's Department (GAD) in calculating the age-related rebates, is estimated at 1.4 per cent.

Mr. Cousins: To ask the Secretary of State for Social Security if he will estimate the percentage of employees in each decile of employees' incomes who do not contribute to personal or occupational pensions. [46491]

Mr. Denham: The information requested is not available in the format requested. Such information as is available is in the table.

29 Jun 1998 : Column: 109

The table contains information based on the 1996 General Household Survey (GHS), using deciles of the earnings distribution derived from the GHS sample.

Percentage of employees who are not current members of an occupational or personal pension scheme, by earnings decile

Earnings decilePercentage
187
272
363
452
541
629
724
815
910
109

Notes:

1. Percentages rounded to the nearest 1 per cent.

2. Excludes some individuals who did not know if they were members, but thought it possible.

3. Includes people who are not current members, but have been members in the past and therefore have some deferred pension rights.

4. Information relates to earnings not income.


The pensions review is considering ways of encouraging people to contribute to second pensions.

Mr. Flynn: To ask the Secretary of State for Social Security what is the estimated cost of the basic retirement pension in 1999-2000 if uprated in April 1999 in line with (a) prices and (b) average earnings. [45825]

Mr. Denham: [holding answer 15 June 1998]: The information is not available in the format requested. Such information as is available is set out in the table.

Forecast expenditure on basic Retirement Pension (RP) is £32 billion in 1998/99. The additional cost of uprating by earnings in April 1998 is provided in the table.

The additional cost of uprating retirement pension and linked benefits by earnings in 1998/99
£ million

Contributory RP onlyContributory RP and linked benefits
Gross cost170200
Means-tested benefit offset-40-50
Net cost120150

Notes:

1. Forecast expenditure on RP has been taken from the 1998 Social Security Departmental Report rounded to the nearest £ billion. Government expenditure plans for future years (1999/2000-2001/2002) will be published after the completion of the Comprehensive Spending Review

2. Estimates in the table are rounded to the nearest £10 million. Totals may not agree due to rounding

3. National Insurance Fund benefit costs were estimated by the Government Actuary's Department

4. Means-tested benefit offsets were calculated using the 1995/96 Family Resources Survey and the May 1996 Income Support Quarterly Statistical Enquiry, both uprated to 1998/99 prices, benefits and earnings levels, and calibrated to the forecasts underlying the 1998 Departmental Report


29 Jun 1998 : Column: 110

Mr. Cousins: To ask the Secretary of State for Social Security what assessment she has made of the potential impact of rebate-only approved personal pension plans on future means-tested social security entitlements and expenditure. [47730]

Mr. Denham: Based on the assumption used by the Government Actuary in "Occupational and Personal Pension Schemes Review of Certain Contracting-out Terms" (Cm3888) an individual investing only the National Insurance Contribution rebate in an appropriate personal pension (APP), would receive a pension broadly equivalent to that which they would otherwise get from the State Earnings Related Pension Scheme (SERPS). The actual amount of pension payable would depend on the costs and performance of each individual pension scheme.

Both the annuity derived from a rebate-only APP and the additional pension derived from SERPS are taken fully into account in claims for means tested benefits. So the numbers of future rebate-only APPs taken out in place of SERPS should have little or no impact on future means tested Social Security entitlements and expenditure.

Mr. Cousins: To ask the Secretary of State for Social Security what information she has collated on lapse rates from approved personal plans by (a) provider, (b) region and (c) socio-economic group; and what extra information on lapse rates she has sought in the course of the Pensions Review. [47727]

Mr. Denham: The information is not available in the format requested. As part of the Pensions Review, we have sought information from the Personal Investment Authority (PIA). PIA figures state that for all personal pensions sold through company representatives, approximately one third had lapsed within three years. Approximately one quarter of those sold through independent financial advisers had lapsed within three years.

We are seeking further information on lapse rates for the Pensions Review.

Mr. Cousins: To ask the Secretary of State for Social Security how many approved personal pension plans were active in each of the last four years; how many were terminated before retirement; and how many new plans were taken out. [47598]

Mr. Denham: The information is set out in the table.

Thousands
1992-931993-941994-951995-96
Appropriate personal pensions
Active Plans(38)5,3965,3805,3765,441
New Plans(38)383217143145
Terminations before retirement(39)162231143--

(38) 1995-96 is the latest year for which the information is available

(39) 1994-95 is the latest year for which the information is available

Notes:

1. The number of terminations before retirement include early retirements and deaths

2. Figures are rounded to the nearest thousand

Source:

The Lifetime Labour Market database (LLMDB); a 1 per cent. sample of the National Insurance Recording System taken at February 1997


29 Jun 1998 : Column: 111

Mr. Cousins: To ask the Secretary of State for Social Security if she will estimate the number of occupational pensions subject to transfer to personal pension plans in the last five years; how many of these transfers were caused by early leavers transfers; and whether the past practices of early leaver benefits will be covered in the Pensions Review. [47593]

Mr. Denham: The information is not available in the format requested. Such information as is available relates to contracted-out schemes and is set out in the table.

The Report of the Pension Provision Group covered some aspects of early leaver benefits and we are considering this Report as part of our Pensions Review. We will publish a Green Paper later this year.

Transfers of pension rights from contracted-out occupational pension schemes to appropriate personal pension schemes(40)

Year(41)Number of Transfers(42)
1993-199437,000
1994-199522,000
1995-199612,000
1996-19979,000
1997-19986,000
Total number of transfers in 5 years85,000

(40) A personal pension scheme is appropriate if it has been given an appropriate scheme certificate by the Secretary of State allowing its members to contract-out of the State Earnings Related Pension Scheme (SERPS)

(41) Each period of a year is the financial year 6 April to 5 April

(42) Figures are rounded to the nearest 1,000, therefore, the total is not their sum

Source:

Contracted Out Employment Group


Mr. Cousins: To ask the Secretary of State for Social Security to what extent present rules for means-tested benefits include paid-up or lapsed personal plans in the calculation of savings; and what plans she has to review these rules. [47731]

Mr. Keith Bradley: The value of funds held in a personal pension scheme are fully disregarded, as is the value of the right to receive a personal pension at a future date. There are no plans to review the disregard.

Mr. Cousins: To ask the Secretary of State for Social Security if she will estimate the total number of active approved personal plans which are financed solely by rebated national insurance contributions in each of the last four years. [47594]

Mr. Denham: The information is set out in the table.

Number of personal pension arrangements financed by national insurance rebates only

YearNumber
1993-942,900,000
1994-953,070,000
1995-963,020,000
1996-973,160,000

Note:

1996-97 is the latest year for which the information is available

Source:

Inland Revenue Statistics 1997


29 Jun 1998 : Column: 112


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