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30 Apr 2004 : Column 1374W—continued
Pension Credit
Paul Flynn: To ask the Secretary of State for Work and Pensions what comparison has been made in take up rates for pension credit between rural and urban areas; and what causes he ascribes to the lower rate of increase in claims for pension credit in inner city areas in comparison to other areas. [166884]
Malcolm Wicks: It is not possible to provide detailed comparisons of levels of pension credit take-up between rural and urban areas, since estimates of numbers of households eligible for pension credit are not available at any level below that of Government office region. However, the information in the table shows the level of increase in numbers of households receiving pension credit as at 31 March 2004 over numbers receiving the minimum income guarantee (MIG) as at 3 October 2003, for local authorities classified as either 'rural' or 'not rural'. This suggests that overall rates of increase in 'not rural' areas are in general lower than in their rural counterparts. Overall, there has been an increase of 31 per cent. in the number of households receiving pension credit over those receiving MIG and an increase of 37 per cent. in the area including Newport, West.
More detailed analysis of pension credit take-up levels is being carried out.
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Pensions
Mr. Webb: To ask the Secretary of State for Work and Pensions if he will publish the results of the pilot exercise for combined pension forecasts carried out with certain employers and pension providers according to "A New Contract for Welfare: Partnership in Pensions", page 90; what steps his Department has taken towards a national roll out of these exercises; and if he will make a statement. [166249]
Malcolm Wicks: The Combined Pensions Forecasting service, an initiative jointly pursued by the Department for Work and Pensions and the pensions industry with the support of the Association of British Insurers and National Association of Pension Funds, was introduced following a series of pilot exercises with representatives from the private sector.
The pilot evaluation was carried out on a confidential basis with employers and pension providers. However, a summary of the results was included in "Simplicity, security and choice: Working and saving for retirement" (pages 43–45. Command 5677) published in December 2002.
We are currently conducting further research into the combined pension forecast service with results due to be published in the summer of this year.
Following the pilots, the combined pension forecasting service went live in October 2001. By the end of March 2004, a total of 1.12 million Combined Pension Forecasts had been issued. To date over 700 employers and pension providers have expressed an interest in participating in the service. By the end of 2005–06 we aim to have reached 6.3 million people.
Mr. Miller: To ask the Secretary of State for Work and Pensions what progress he has made in identifying pension funds that have gone into wind-up with inadequate funds to meet their liabilities since Royal Assent to the Pensions Act 1996. [168862]
Malcolm Wicks:
Information is not available on all the pension schemes which have gone into wind up with inadequate funds since Royal Assent to the Pensions Act 1995. We are currently exploring with pension scheme trustees and other industry representatives the basis on which we can establish firm estimates of the
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extent of the problem of defined benefit schemes winding-up under funded, the numbers affected and the potential scale of losses.
Mr. Willetts: To ask the Secretary of State for Work and Pensions whether local authorities will be liable for the pension protection fund levy. [168164]
Malcolm Wicks: Local authority defined benefit pension schemes will not be liable for the pension protection fund levy as they will never have recourse to PPF assistance. This is because the sponsoring employers of local government pension schemes can never become insolvent.
Mr. Webb: To ask the Secretary of State for Work and Pensions how many full-time equivalent Pension Protection Fund staff he expects to employ; and if he will make a statement. [168987]
Malcolm Wicks: The way in which the PPF is organised and the staffing requirements which will flow from that organisational design will ultimately be a decision for the PPF Board. However we are having to make a number of planning assumptions in order to ensure that the PPF is operational by Spring next year. Our current working assumption is to have a core staff of between 100 and 150 full time equivalent people in place for spring 2005.
The PPF is a major new reform, and we will ensure that we continue to engage thoroughly with all our partners to get it right.
Chris Grayling: To ask the Secretary of State for Work and Pensions what his policy is on the rights of individuals to continue to work (a) part-time and (b) full-time after retirement; and what rules apply to pension provision in such circumstances. [166885]
Malcolm Wicks:
Giving people the choice to work up to and beyond State Pension age is critical to ensure the economic prosperity of our society in terms of both work and pensions. Individuals must have the choice and opportunity to work, either full or part time, and save longer towards a financially secure retirement. Flexible working and retirement options can be
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especially important for individuals who have had interrupted working lives, or have on-going caring responsibilities to balance alongside their work.
In 'Simplicity, security and choice: Working and saving for retirement' (December 2002) we set out our proposals to help individuals continue in full time or part time work longer. These included extra back to work help for those over 50, more generous incentives for deferring state pensions, tax rule changes to allow people to draw their occupational pension while continuing to work for the same employer and encouraging occupational pensions to support flexible retirement.
The Finance Bill will introduce a simplified pension regime which increases choice and flexibility for both companies operating pension schemes and individuals saving in such schemes. The Finance Bill will mean that it will no longer be necessary for an individual to leave employment in order to access an employer's occupational pension. The tax rules will no longer dictate that an individual cannot receive their pension and continue to work for that same employer. This increased flexibility will enable people to move from full-time to part-time work and help to make the transition from work to retirement a more smooth and gradual process.
In this year's Budget we also announced a new high profile national guidance campaign to raise employers' awareness of, and ability to adopt, flexible employment and retirement opportunities in order to increase the recruitment, training and retention of older workers.
Mr. Willetts: To ask the Secretary of State for Work and Pensions pursuant to the answer of 25 March 2004, Official Report, column 1030W, on pensions, if he will list the gross costs of the proposal referred to in footnote two and each of the offsets identified in footnotes three to six. [168170]
Malcolm Wicks: The information is not available in the format requested. Such information as is available is in the table:
| Gross cost | Income-related benefits saving | State second pension saving | Savings credit saving | |
|---|---|---|---|---|
| 2004–05 | 17.1 | 2.9 | 0.0 | 0.4 |
| 2005–06 | 17.8 | 3.0 | 0.0 | 0.4 |
| 2006–07 | 18.8 | 3.1 | 0.1 | 0.5 |
| 2007–08 | 20.0 | 3.2 | 0.1 | 0.6 |
| 2008–09 | 21.3 | 3.4 | 0.2 | 0.6 |
Notes:
1. Figures are for Great Britain in 2003–04 price terms rounded to the nearest £100 million. It is assumed the change comes into effect from April 2004 and basic State Pension is uprated in line with earnings thereafter.
2. Gross costs are estimated by the Government Actuary's Department and are consistent with Budget 2004 assumptions and use 2002 based population projections. Gross costs refer to the additional costs after allowing for National Insurance Fund benefits and non-means tested vote benefits.
3. Income-related benefit offsets are calculated using the DWP policy simulation model and April 2004 benefit rates.
4. Additional income tax revenue is estimated by the Inland Revenue using 2004 tax rates. We are unable to publish any income tax forecast estimates for years beyond that which is published in the Financial Statement and Budget Report (currently 2006–07). The income tax estimates for 2004–05 to 2006–07 are based on the 2001–02 Survey of Personal Incomes and are projected in line with March 2004 Budget assumptions. The income tax revenue in 2004–05 is £4.6 billion, for 2005–06 is £4.9 billion and for 2006–07 is £5.2 billion, for illustrative purposes, it is assumed income tax revenue will be a fixed percentage of the gross cost for this option in 2007–08 and 2008–09 although estimates for later years would be subject to a greater degree of uncertainty.
5. The savings from abolishing the State Second Pension are calculated by the Government Actuary's Department and are consistent with the long term Public Expenditure Survey forecasts. No allowance has been made for changes to contracting out rules.
6. The savings credit is assumed to be frozen, payments uprated by prices, with no new recipients after 2004. Figures for 2004 and 2005 are based on published medium term forecasts, while those for 2006–07 and beyond are based on the illustrative long-term projections of benefit expenditure underlying Annex A of the Budget report. This is a separate saving from the offsets in income related benefits outlined in note 3.
7. Totals may not sum due to rounding.
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Mr. Simmonds: To ask the Secretary of State for Work and Pensions how many people under 30 have taken out a stakeholder pension. [167878]
Malcolm Wicks: Information for the 2001–02 tax year is shown in the table.
Information for the 2002–03 tax year will be available from autumn 2004.
| Tax year | Number of people aged under 30 with a stakeholder pension |
|---|---|
| 2001–02 | 230,000 |
Notes:
1. Information is derived from a sample of annual returns of information submitted to the Inland Revenue by stakeholder pension providers.
2. Figure rounded to the nearest 10,000.
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