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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
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.
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.
| 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.|
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. 
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.
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. 
James Purnell: Projected incomes from private pension saving are modelled using the Departments 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. 
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; 
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.
1. Figure is rounded to the nearest 100,000, and relates to people estimated to be resident in the UK.
2. Figure only takes into account Class 3 national insurance contributions paid in or before the 2003-04 tax year. Data after this year is not available.
3. Figure includes all individuals who will reach state pension age on or after 6 April 2010 who have paid at least one Class 3 national insurance contribution in or before the 2003-04 tax year.
4. Figure does not take into account the effect of deaths, or of people moving abroad, after 2003-04.
5. Figures are from a 1 per cent. sample and so are subject to sampling variation.
Lifetime Labour Market Database 2, which is a 1 per cent. sample of national insurance records.
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. 
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. 
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.
(a) Under current policies, total contributory state pension (basic state pension and state second pension) would be around £100 a week at state pension age, before any deductions for tax. Under a system with an earnings uprated guarantee credit from 2008, a non-saver would also be entitled to claim pension credit worth about £49 a week, while a saver would be entitled to claim pension credit worth about £36 a week, on top of their £34 a week private pension savings. A saver would have a total state and private income, net of pension credit, of around £170 a week at state pension age.
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