| Previous Section | Index | Home Page |
21 Jan 2003 : Column 263W—continued
Pensions
Paul Flynn: To ask the Secretary of State for Work and Pensions what would be the weekly savings required to provide the retirement incomes shown in Figure 3.1 of the pensions Green Paper (Cm 5677) if the rate of return on savings exceeded earnings growth by 1.5 per cent. and 2.5 per cent. respectively. [89645]
Mr. McCartney: Figure 3.1 of the Green Paper Simplicity, security and choice: working and saving for retirement (Cm 5677) is reproduced in the following two tables under the alternative assumptions about the rate of return on saving. Each of the two tables shows the required level of weekly saving in order to generate a given target income in retirement. The level of saving is in net terms, i.e. before the addition of tax relief at the basic rate, while the target income is in gross terms, i.e. before the deduction of any tax liability. Apart from the revisions to the assumption about the rate of return all other relevant assumptions are as set out in Annex 5 of the Green Paper.
21 Jan 2003 : Column 264W
| Age start saving (£) | |||
|---|---|---|---|
| Target weekly income (£) | 20 years | 30 years | 40 years |
| 50 | 10 | 15 | 25 |
| 100 | 25 | 35 | 45 |
| 200 | 50 | 65 | 95 |
| 300 | 75 | 100 | 140 |
| Age start saving (£) | |||
|---|---|---|---|
| Target weekly income (£) | 20 years | 30 years | 40 years |
| 50 | 10 | 15 | 20 |
| 100 | 20 | 25 | 40 |
| 200 | 40 | 55 | 80 |
| 300 | 60 | 80 | 120 |
Matthew Taylor: To ask the Secretary of State for Work and Pensions if he will estimate the cost of (a) an increase of £5 in the rate of the basic state pension and (b) the introduction of age additions of (i) £5 for pensioners aged 75 to 79 and (ii) £10 for pensioners aged 80 years or over, on the basis that the age additions for
21 Jan 2003 : Column 265W
those aged 75 to 79 or 80 years and over are paid in full, regardless of contribution record; and if he will make a statement. [90172]
Mr. McCartney: We estimate that it would cost around £2.6 billion in 2003–04 to increase the maximum rate payable of the basic State pension by £5 per week and all other payments proportionately.
If weekly age additions of £5 were introduced for pensioners aged 75–79 and £10 for pensioners aged 80 years and over, we estimate that this would cost around £1.8 billion in 2003–04.
- Notes:
- 1. Estimates are in cash terms for Great Britain and are rounded to the nearest £100 million.
- 2. Costs are gross, i.e. no account has been taken of offsetting savings in income related benefits.
Mr. Webb: To ask the Secretary of State for Work and Pensions pursuant to his answer of 9 January 2003, ref 88793, on pensions, if a UK citizen moves from a country where UK pensions are not uprated back to the UK and thence to another EU member state, whether they will be entitled to an annually uprated basic pension, and if this payment will be at the same rate as if they lived in the UK. [91299]
Mr. McCartney: If a UK citizen who is entitled to receive a UK State Pension moves back to the UK from a country where UK pensions are not uprated and then moves to another EU member state, they will be entitled to an annually uprated State Pension in the EU member state that is paid at the same rate as if they lived in the UK.
Paul Flynn: To ask the Secretary of State for Work and Pensions what the estimated retirement income from the state in 2050 is, as a percentage of their earnings, for employees at the income levels shown in Figure 1.7 of the pensions Green Paper (Cm 5677), assuming that the state second pension remains earnings-related and that they are not contracted out; and what would be the corresponding figures if the basic state pension were increased in line with average earnings in 2004 and subsequent years. [89644]
Mr. McCartney: The figures in Table 1 show the projected replacement rate provided by the state for individuals retiring in 2050. These figures correspond directly with those behind Figure 2.7 in the Green Paper Simplicity, security and choice: working and saving for retirement (Cm 5677).
Retirement income from the state includes the basic state pension, state second pension and pension credit. The hypothetical individuals are assumed to be contracted in to state second pension in all years. A full list of modelling assumptions is set out in Annex 5 of the Green Paper.
21 Jan 2003 : Column 266W
| Weekly earnings (£) | Replacement rates (per cent.) |
|---|---|
| 100 | 139 |
| 200 | 69 |
| 300 | 48 |
| 400 | 37 |
| 500 | 30 |
| 600 | 25 |
Note:
All figures rounded to nearest 1 per cent.
Source:
Department for Work and Pensions calculations.
The projections in Table 2 have been made on exactly the same basis as those in Table 1 but for the uprating of the basic state pension by earnings as opposed to prices.
| Weekly earnings (£) | Replacement rates (per cent.) |
|---|---|
| 100 | 142 |
| 200 | 71 |
| 300 | 49 |
| 400 | 38 |
| 500 | 31 |
| 600 | 26 |
Note:
All figures rounded to nearest 1 per cent.
Source:
Department for Work and Pensions calculations.
In both sets of projections the start point of the savings credit element of pension credit is set at the value of the full basic state pension. For the projections in Table 2 this start point is of higher value because the basic state pension has been assumed to increase in line with earnings and not prices.
All figures are rounded to the nearest 1 per cent.; this degree of accuracy has been used in this question to indicate that the projections in Table 2 are slightly higher than those in Table 1 for all hypothetical individuals.
Pensions Green Paper
Mr. Frank Field: To ask the Secretary of State for Work and Pensions what the basis was for the calculation made on page 102 of the Green Paper "Simplicity, Security and Choice: Working and Saving for Retirement", that a £20,000 lump sum could be taken instead of a state pension. [90818]
Mr. McCartney: The figure of £20,000 is in broad terms the amount of State pension that a hypothetical person with a State pension entitlement of £100 per week would forgo due to deferring for a five-year period, net of income tax applied at the standard rate of 22 per cent.
The example was for illustrative purposes only, and should not be regarded as a statement of policy. The detail of policy on the calculation and tax treatment of the lump sum will be decided following the consultation.
21 Jan 2003 : Column 267W
Mr. Frank Field: To ask the Secretary of State for Work and Pensions if he will set out the assumptions made for the estimate, given in the Green Paper "Simplicity, Security and Choice: Working and Saving for Retirement", that UK state spending on pensions will continue broadly at its current level of around five per cent. [90822]
Mr. McCartney: The assumptions can be found on page 148 of the green paper 'Simplicity Security and Choice: Working and Saving for Retirement.' (Cm 5677)
Mr. Frank Field: To ask the Secretary of State for Work and Pensions how many of those with liquid financial assets of more than £10,000 are members of an occupational or private pension scheme. [90821]
Mr. McCartney: In 2001–02, there were around 6.4 million people of working age in Great Britain in a benefit unit with total capital assets of more than 10,000. Of these, around 3.8m were also contributing to some form of private pension.
- Notes:
- 1. All figures are estimates and are taken from the Family Resources Survey (FRS). 2001–02 is the latest year for which data is available.
- 2. No provision has been made for any debts that might be simultaneously held by individuals.
- 3. Some people with capital assets of more than 10,000 will be members of, but not contributing to, a private pension. These might be people who are retired, who are in between jobs or whose circumstances may have recently changed. These people are not included in the 3.8 million estimate given above.
- 4. The estimates are based on sample counts that have been adjusted for non-response using multi-purpose grossing factors that control for tenure, Council Tax Band and a number of demographic variables. Estimates are subject to sampling error and to variability in non-response.
- 5. Questions on assets are a sensitive part of the FRS questionnaire and have relatively low level of response. Evidence suggests some under reporting of. capital by respondents.
Ringwood Jobcentre
Mr. Chope: To ask the Secretary of State for Work and Pensions (1) what consultations have been carried out on the proposal to withdraw Social Fund services from the Ringwood Jobcentre; and what alternative arrangements are proposed for those living in Three Legged Cross and Kenwood. [90721]
- (2) what enhanced services will be provided at Ringwood Jobcentre when Jobcentre Plus is introduced. [90754]
Malcolm Wicks: We are progressively extending the new integrated Jobcentre Plus office network across the country over the next four years. These offices are delivering a single, integrated service to people of working age claiming benefits, with a clear focus on work. They provide an active and responsive service to help people find jobs, and give advice on the full range of help and support available to them.
Full details of the services available in these new offices are described in the Jobcentre Plus Business Plan 2002–03, a copy of which is available in the Library.
21 Jan 2003 : Column 268W
Plans are currently being drawn up to roll out the new integrated Jobcentre Plus service in Hampshire District, which includes Ringwood Jobcentre. The future provision of Social Fund services in the District forms part of the plans. Partners and stakeholders were consulted about these plans in June and September 2002. Their comments are being taken into consideration in reaching final decisions, which will be announced in due course.
| Next Section | Index | Home Page |