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7 Nov 2006 : Column 1133W—continued

Due to the measures we have taken since 1997, including the introduction of pension credit, pensioner poverty rates in Great Britain are currently at historically low levels, even while the country has been enjoying economic prosperity which traditionally benefits working age incomes relative to pensioner incomes. The effects of our proposed pension reforms are set out in the White Paper: “Security in retirement: towards a new pensions system” (Cm 6841). This
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includes securing the gains we have made against pensioner poverty into the future, through our commitment to continue uprating the standard minimum guarantee in pension credit with earnings into the long term.

Mr. Laws: To ask the Secretary of State for Work and Pensions what steps his Department is taking (a) to reduce and (b) to eliminate pensioner poverty. [96315]

James Purnell: The Government have introduced a suite of measures since 1997 to help older people enjoy a better standard of living, most notably the introduction of the minimum income guarantee and then pension credit; the creation of a dedicated Pension Service to improve service delivery and actively promote take-up of entitlements; above-inflation increases in the basic state pension; winter fuel payments for people over 60; and free television licences for people over 75. The value of the safetynet we provide for the poorest pensioners has increased by a third in real terms since 1997.

Between 1996-97 and 2004-05 the number of pensioners in Great Britain in relative low income, after housing costs, has fallen by over a third, from 2.8 million to 1.8 million. Once housing costs are accounted for, a pensioner today is now less likely to be in low income than any one else in society.

The White Paper “Security in retirement: towards a new pensions system” (Cm 6841) announced our commitment to secure these gains into the future by uprating both the basic state pension and the standard minimum guarantee in pension credit in line with earnings over the long term.

Pensioners

Dr. Francis: To ask the Secretary of State for Work and Pensions how many (a) female and (b) male pensioners there are in each parliamentary constituency in Wales. [97978]

James Purnell: The information requested is in the following table:


7 Nov 2006 : Column 1135W
Parliamentary constituencies Male Female

Aberavon

5,110

8,330

Alyn and Deeside

5,330

8,790

Blaenau Gwent

4,970

8,400

Brecon and Radnorshire

6,490

10,140

Bridgend

6,290

10,440

Caernarfon

4,960

8,520

Caerphilly

5,690

9,450

Cardiff, Central

3,700

6,190

Cardiff, North

5,730

9,960

Cardiff, South and Penarth

5,680

9,110

Cardiff, West

4,710

8,120

Carmarthen, East and Dinefwr

6,340

10,120

Camarthen, West and South Pembrokeshire

6,490

10,490

Ceredigion

6,130

9,670

Clwyd, South

5,070

8,440

Clwyd, West

6,710

11,120

Conwy

5,950

10,120

Cynon Valley

4,430

7,720

Delyn

5,210

8,470

Gower

6,570

10,780

Islwyn

4,740

7,910

Llanelli

6,290

10,350

Meirionnydd Nant Conwy

3,980

6,460

Merthyr Tydfil and Rhymney

5,000

8,330

Monmouth

7,070

11,790

Montgomeryshire

5,220

7,960

Neath

5,520

9,320

Newport, East

5,180

8,190

Newport, West

5,690

9,580

Ogmore

4,590

7,590

Pontypridd

5,710

9,610

Preseli Pembrokeshire

6,290

10,000

Rhondda

5,340

9,020

Swansea, East

5,200

8,450

Swansea, West

5,850

9,550

Torfaen

5,390

9,100

Vale of Clwyd

6,120

10,170

Vale of Glamorgan

6,950

11,360

Wrexham

4,600

7,950

Notes: 1. Figures are as at February, 2006 and have been rounded to the nearest 10 with extra built-in protection to protect identity. 2. Parliamentary constituencies are assigned by matching postcodes against the relevant Office for National Statistics postcode directory. Source: DWP Information Directorate: Work and Pensions Longitudinal Study (WPLS) 100 per cent. data.

Pensions

Mr. Philip Hammond: To ask the Secretary of State for Work and Pensions how many of the 170,000 private sector employers listed as offering employer pension contributions worth at least 3 per cent. of gross salary in table 1.xiii of the Pensions White Paper, “Security in retirement: towards a new pensions system” use automatic enrolment; and how many employees work for (a) those who use and (b) those who do not use automatic enrolment. [90341]

James Purnell: There is no official statistic of the number requested. However the Department has estimated, using data from the Employers Pension Provision Survey (2005) and Small and Medium-sized Enterprise Statistics (2004), that about 3 per cent (5,500 employers rounded to the nearest 100) of the 170,000 private sector employers listed as offering employer pension contributions worth at least 3 per cent. of gross salary in table 1 .xiii of the Pensions White Paper “Security in retirement: towards a new pension system” use automatic enrolment into their largest scheme.

Of the 9.2 million employees that work for employers offering employer pension contributions worth at least 3 per cent. of gross salary we estimate that (a) about 1.8 million employees work for those who currently use automatic enrolment; and (b) about 7.3 million employees work for those who do not currently use automatic enrolment.

Numbers are rounded to two significant figures.


7 Nov 2006 : Column 1136W

Mr. Philip Hammond: To ask the Secretary of State for Work and Pensions what assumptions about pensioner incomes from private saving underpin the projections in figure 9 of his White Paper on Pensions. [90420]

James Purnell: Projected incomes from private pension saving are modelled using the Department’s Pensim2 microsimulation model. This includes detailed projections of labour market histories, pension scheme membership, contracting-out status and contributions. Incomes from other (non-pension) private saving are assumed to grow broadly in line with earnings. The projections exclude the effect of any increases in private pension provision resulting from the introduction of personal accounts.

Mr. Philip Hammond: To ask the Secretary of State for Work and Pensions what assumption about the level of real earnings growth over the period 2006-07 to 2049-50 underpins the calculations in the Pensions White Paper “Security in retirement: towards a new Pensions System”. [90422]

James Purnell: For the period to 2010-11, the assumptions on earnings growth used in the White Paper are in line with the economic assumptions described in the Budget 2006 Financial Statement and Budget report. For the period beyond 2010-11, real earnings are assumed to increase at 2 per cent. per year.

Mr. Philip Hammond: To ask the Secretary of State for Work and Pensions (1) what estimate he has made of the number of people who will reach state pension age on or after 6 April 2010 who will, excluding any qualifying years derived from class 3 national insurance contributions, have at least 30 qualifying years but not enough qualifying years to receive a full basic state pension under the present system; [90426]

(2) how many individuals who will reach state pension age on or after 6 April 2010 have paid Class 3 national insurance contributions. [90428]

James Purnell: The information is not available in the format requested. Such information as is available is shown as follows:

There are estimated to be around 1.1 million individuals who will reach state pension age on or after 6 April 2010 who have paid Class 3 national insurance contributions for the 2003-04 tax year or an earlier year.


7 Nov 2006 : Column 1137W

Mr. Philip Hammond: To ask the Secretary of State for Work and Pensions which measure of earnings growth he plans to use (a) to uprate the basic state pension from 2012 and (b) to uprate the band of earnings of which contributions to personal accounts will be paid. [90435]

James Purnell: The White Paper “Security in retirement: towards a new pensions system” states that the earnings link will be restored to the basic state pension. This will be done, subject to affordability and the fiscal position, in 2012 but in any event at the latest by the end of the next Parliament. The restoration of the earnings link together with other state pension reforms will help provide a firm state underpin for the introduction of personal accounts in 2012, which will make it easier for more people to save more for their retirement.

Assumptions on earnings growth used in the White Paper are in line with economic assumptions described in the Budget 2006 Financial Statement and Budget Report, where earnings are assumed to increase in real terms at a rate of two per cent. per year in the longer term. The Government currently use the calculation of average earnings indices from the Office for National Statistics to uprate social security benefits such as the pension credit standard minimum guarantee. We expect to use average earnings as the index for uprating the basic state pension but will keep the exact measure to be used under review. We will set out our proposals on personal accounts later this year.

Mr. Philip Hammond: To ask the Secretary of State for Work and Pensions if he will estimate the net value of state pension and pension credit payments to the median earner illustrated in figure 8 of the White Paper (a) under current policies and (b) if the reforms outlined in the Pensions White Paper “Security in Retirement: Towards a new pension system” are implemented. [90459]

James Purnell: Under our reforms, more people will be receiving state pensions based on their national insurance records, and there will be a more generous basic state pension due to the restoration of the earnings link. This will provide a solid foundation for private saving. The guarantee credit will continue to provide a safety net and reforms to the savings credit will reduce the spread of means testing and support the savings incentives, which are integral to the reform package.

For the median earner illustrated in figure 8, and in today’s earnings terms:


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