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Pensioners (Fuel Concessions)

Chris Ruane: To ask the Secretary of State for Work and Pensions what the total value was of help given to pensioners to help them with fuel bills in each year from 1979 to 1997. [44523]

Mr. Plaskitt: The Social Fund Cold Weather Payments scheme was introduced in October 1988. It replaced a similar but not identical Cold Weather Payments scheme which had begun in December 1986. Prior to that there had been a system of payments based on local office discretion.

The form of the current Cold Weather Payments scheme dates from 1991–92. Under the scheme, a Cold Weather Payment is made when the average temperature has been recorded as, or is forecast to be, 0°C or below over seven consecutive days at the weather station linked to the eligible customer's postcode. Eligible customers are now those awarded pension credit, or those awarded income support or income-based jobseeker's allowance who have a pensioner or disability premium or a child who is disabled or aged under 5, when the temperature criterion is met for their postcode.

Data are available only from the start of the Social Fund Cold Weather Payments scheme. Only total expenditure is available, not expenditure on pensioners. The available data is in the following table.

Winter Fuel Payments were introduced in winter 1997–98 to ensure that pensioners can afford to heat their homes in the winter months.
Cold weather payments in Great Britain

	Total expenditure (£ million)
1988–89	0.0
1989–90	0.4
1990–91	9.3
1991–92	23.0
1992–93	15.0
1993–94	12.4
1994–95	0.1
1995–96	61.6
1996–97	42.2

Notes:
1. Figures for 1990–91 include payments for the winter of 1990–91 made in April and May 1991.
2. As an indication of expenditure on pensioners, the proportion of total Cold Weather Payments expenditure on pensioners in 2000–01 was 50 per cent. (2000–01 is the first year for which both data is available and there was substantial Cold Weather Payments expenditure.) (Source: DSS Programme Accounting Computer System.)
3. Figures have been rounded to the nearest £0.1 million.
4. Total expenditure for 1988–89 was £2,510. That winter was a particularly mild one.
Source:
Secretary of State's annual reports on the Social Fund.

 
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Pensions

Mr. Laws: To ask the Secretary of State for Work and Pensions what estimate he has made of the value of the basic state pension as a proportion of average earnings were current uprating policy to continue in (a) 2010, (b) 2020, (c) 2030, (d) 2040 and (e) 2050. [35364]

Mr. Timms: The information is in the table:

		Percentage
	Full-time median earnings	Full-time mean earnings
2010	17	14
2020	14	12
2030	12	10
2040	10	8
2050	8	7

Note:
The figures are based on the earnings of full-time employees as recorded by the Annual Survey of Hours and Earnings (ASHE). In April 2005 the figure for median earnings was £431 a week and mean earnings was £517.

Mr. Waterson: To ask the Secretary of State for Work and Pensions how many applications were made for deemed buy-back under the state second pension in each of the last five years; how many individuals have been offered deemed buy-back in each year; and how many have taken up the offer in each year. [43898]

Mr. Timms: In order for a pension scheme member to qualify for deemed buy-back, a scheme's trustees must prove to HM Revenue and Customs (HMRC) that the scheme qualifies for deemed buy-back. HMRC then calculates the amount required to restore state scheme rights to the level they would have been had the pension scheme member never been contracted-out. On receipt of HMRC's calculations, the trustees will determine whether the member actually qualifies for deemed buy-back, before giving the member the options for securing their accrued benefits in this way.

None of these calculations were issued before 2003. Since 2003, HMRC has issued approximately 7,000 calculations. Of the 7,000 calculations issued, 2,500 members do not qualify for deemed buy-back. HMRC has been notified of 58 pension scheme members who have opted for deemed buy-back (two members in 2004 and 56 members in 2005) and payment has been received for each of them. HMRC has received no information from the trustees regarding the remaining 4,442 pension scheme members.

Gregory Barker: To ask the Secretary of State for Work and Pensions what assessment he has made of the impact of the Finance Act 2004 on stakeholder pensions (a) in 2005 and (b) over the next 10 years; and if he will make a statement. [47164]

Mr. Ivan Lewis: I have been asked to reply

The Finance Act 2004 introduces a radical simplification of the pension tax rules that will sweep away the complexity in the current rules and introduce greater choice, flexibility, transparency, clarity and cost-efficiency. This will benefit all those who participate or want to participate in pension schemes.
 
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The Regulatory Impact Assessment of April 2004 'Simplifying the Taxation of Pensions' [www.hmrc.gov.uk/ria/simplifying-pensions.pdf] sets out the Government's assessment of the impact of the new rules including the plans to evaluate the effects of the Finance Act 2004 changes on pensions. Baseline research on employers and the financial services industry is currently in development.

Post Office Card Account

Mr. Laws: To ask the Secretary of State for Work and Pensions (1) what research his Department has carried out into customer satisfaction with the Post Office card account; and if he will make a statement; [45577]

(2) what estimate he has made of the value of the contract for the Post Office card account; and if he will make a statement. [45579]

Mr. Plaskitt: The Post Office card account is a product provided by Post Office Limited. My Department has not undertaken any customer satisfaction research specifically relating to the Post Office card account. However, I understand Post Office Limited have recently undertaken such research.

Around 3.6 million customers of the Department for Work and Pensions currently have their benefit or pension paid into a Post Office card account. (HM Revenue and Customs and the Northern Ireland Social Security Agency also pay some of their customers into a Post Office card account, taking the total number of card accounts to around 4.25 million.) The Post Office card account contract will cost the Government at least £1 billion between 2003 and 2010. The precise value of the contract will depend on how many customers use the card account between now and the end of Government funding in March 2010.

Mr. Laws: To ask the Secretary of State for Work and Pensions for what reasons his Department has decided to end the Post Office card account (POCA) contract; how many users of the POCA will be affected by this decision; and if he will make a statement. [45586]

Mr. Plaskitt [holding answer 26 January 2006]: Around 3.6 million customers of the Department for Work and Pensions (DWP) currently have their benefit or pension paid into a Post Office card account. (HM Revenue and Customs and the Northern Ireland Social Security Agency also pay some of their customers into a Post Office card account, taking the total number of card accounts to around 4.25 million.)

The Post Office card account was introduced in April 2003 to help support the conversion of some customers from order books to Direct Payment. It was aimed at those who did not already have a suitable account and was designed as a stepping stone" to help people who had not used a bank account before get used to banking before moving on to an account offering more features.

In line with our wider policy on financial inclusion, we have always made it clear that payment into a bank or building society account is the best option for the overwhelming majority of customers. The Post Office card account is a simple account with limited functions. It can only receive payments of benefits, pensions and tax credits. It does not, for example, allow customers to make savings on fuel bills by paying by Direct Debit; it
 
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cannot receive payments of wages; cheques cannot be paid in to the Post Office card account; and it does not pay interest on balances.

Although the card account was designed for those who did not already have a bank or building society account, 70 per cent. of people who have opened one already have an account. And the remaining 30 per cent. have shown that, by managing to open and operate a Post Office card account, they can use other easy to operate banking products—including basic bank accounts, which are widely available and accessible at Post Office branches. The Post Office card account has allowed some customers to move from receiving their benefit or pension through cashing an order book at the Post Office counter to getting used to the basics of banking. In practice, there is no real difference in accessing money at the Post Office via a bank account compared to a Post Office card account—customers can collect the same money, on the same day as they do now at the Post Office, by using a plastic card and a personal identification number.

The Post Office card account contract runs between 2003 and 2010. There was never any expectation that the Government should provide funding beyond that date and there is no case for doing so. The Post Office card account does little to promote financial inclusion. Customers will still be able to collect their benefit or pension at the Post Office by using their bank or building society account there. Around 25 different bank accounts can be accessed at Post Office branches.

We also understand Post Office Limited is developing new banking and savings products which will be aimed at existing Post Office card account customers. We would like every DWP customer who currently has a Post Office card account to do their banking at the Post Office if that is in their best interests. DWP can help people move off Post Office card accounts to having their benefit or pension paid into more suitable bank or building society accounts, and help them open new ones which can be used at the Post Office if necessary. We will work with the Post Office and other stakeholders to develop a strategy to move customers from the Post Office card account. Our priority will be to ensure that this is a straightforward process for the customers themselves.

Danny Alexander: To ask the Secretary of State for Work and Pensions how many people receive benefit or pension payments through a Post Office card account (a) in total and (b) broken down by region. [46881]

Mr. Plaskitt: The total number of benefit and pension accounts, which are paid by direct payment into a Post Office card account, is 4,508,800. I refer the hon. Member to the written answer I gave on 24 January 2006 for the breakdown by region.

Danny Alexander: To ask the Secretary of State for Work and Pensions what criteria will be used to assess whether the contract for the Post Office card account is continued for the payment of benefits and pensions after 2010. [46883]

Mr. Plaskitt: The Post Office card account contract is a finite contract, which ends in March 2010. The question of criteria, therefore, does not arise.
 
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Customers will still be able to collect their benefits and pension at the Post Office. If they so wish. Around 25 different accounts can be accessed at the Post Office. The process for withdrawing money from these accounts is the same as for the Post Office card account.

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