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Mr. Philip Hammond:
To ask the Secretary of State for Work and Pensions if he will break down the cost of proposed reforms to the state second pension, as shown
in figure 9 of the Pensions White Paper, Security in Retirement: Towards a New Pension System, to show the (a) (i) gross and (ii) net costs of reforms to accrual rules on the basis of existing coverage and (b) (A) gross and (B) net costs of changes to coverage. 
James Purnell: Under our reforms to the state second pension, individuals will accrue a new flat rate amount of £1.40 a week for each year spent working or caring. This will replace the great complexity of the existing flat-rate calculation. The residual earnings- related element will gradually be withdrawn over 20 years. These significant simplification measures and our proposals to increase coverage of state second pension will ensure that people who work or who have caring responsibilities will more easily recognise the value of the contribution they make.
The following table contains the projected additional cost of state second pension reform. Column (a) shows the additional costs of flat-rating and simplifying the state second pension on the basis of existing coverage measures. Column (b) shows the additional costs of improving coverage of the state second pension, after flat-rating and simplification.
|Gross and net costs of S2P reforms (in 2006-07 price terms)|
|(a) Additional cost of flat-rating and simplification (without coverage measures)||(b) Additional cost of coverage measures (after flat-rating and simplification)|
1. Estimates of additional expenditure are consistent with the policy detail set out in the Regulatory Impact Assessment accompanying the Pensions Bill. Net costs include savings seen from reduced expenditure on other income related benefits (pension credit, housing benefit and council tax benefit). They do not include any change in income tax revenue or national insurance.
2. Net costs assume the pension credit standard minimum guarantee is uprated by earnings from 2008. Net costs do not include the effect of direct reforms to the savings credit.
3. Costs assume contracting-out of DC schemes is abolished in 2012. Column (b) assumes the state second pension has already been flat-rated and simplified. Applying the changes in a different order would alter the gross and net cost of each individual policy, but not the total additional cost of reform.
4. Abolition of contracting-out for DC schemes from 2012 decreases the cost of the contracted-out rebate. This is not included in the figures above.
5. Costs or savings presented in the table are based on long-term projections of United Kingdom benefit spend, consistent with the pre-Budget report 2006.
6. Figures exclude savings resulting from raising state pension age.
7. Figures exclude the effect of personal accounts.
|Title of project||Consultant|
Mr. Philip Hammond: To ask the Secretary of State for Work and Pensions what assessment he has made of the impact on current pension providers in lost charges and fees of the introduction of personal accounts and the capture by personal accounts of £3.2 billion of contributions currently being made to them as suggested on page 23 of the White Paper Personal Accounts: a new way to save. 
James Purnell: The proposals contained in the White Paper, Personal accounts: a new way to save present a significant opportunity to the financial services industry, including pension providers. As a result of automatic enrolment, pension schemes and providers in the existing employer-sponsored arena will see an increase in membership and contributions. The personal accounts scheme will be delivered by the private sector creating competition for new contracts for administration and fund management services. It is estimated that the reforms will result in an annual increase in household saving of £4 to 5 billion a year, and in the long term the personal accounts scheme will have between £100 billion and £200 billion in funds under management.
Mr. Gordon Prentice: To ask the Secretary of State for Work and Pensions pursuant to his Answer of 29 January 2007, Official Report, column 98W, on pensions, for what reason UK pensions are index linked for UK citizens living in (a) Bermuda, (b) Gibraltar and (c) Sovereign bases on Cyprus and not in the other countries mentioned in the Answer. 
(a) the ECs Social Security Regulations, which apply to pensioners who have a UK state pension living in the European Economic Area and Switzerland; and
(b) reciprocal social security agreements with other countries, which allow for annual uprating to be paid there.
The EC Social Security Regulations apply to both Gibraltar and the whole of the island of Cyprus, including the sovereign base areas. A reciprocal social security agreement exists with Bermuda. We are therefore required to pay the annual uprating in these countries.
Mr. Philip Hammond:
To ask the Secretary of State for Work and Pensions how many staff will be
answering calls on each of his Department's benefit helplines between 23 December 2006 and 3 January 2007. 
In arriving at staffing levels for normal or seasonal days, helplines take account of historical data on the volume of calls expected, anticipated impacts such as mailings campaigns and provide appropriate staffing levels. All DWP contact centres are closed on a normal Sunday and Bank Holidays apart from two helplines operated by Private Sector Partnersthe Pensions Information Line and Pensions Guide Order Line.
|Saturday 23 December 2006||Sunday 24 December 2006||Wednesday27 December 2006||Thursday 28 December 2006||Friday 29 December 2006|
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