| Previous Section | Index | Home Page |
22 July 2008 : Column 1194W—continued
Pensions: Financial Assistance Scheme
Jenny Willott: To ask the Secretary of State for Work and Pensions what the administrative costs of the Financial Assistance Scheme were in each month since April 2007; and if he will make a statement. [216984]
Mr. Mike O'Brien: The information is in the following table.
| Month | Expenditure (£) |
| (1) July costs include an element for IT (maintenance) annual costs circa £451,434 (2) September costs include an element for IT (licence and change requests) annual costs circa £159,000. (3) November costs include circa £50,000 salary costs in respect of backdated pay award and circa £76,000 IT costs. | |
Personal Accounts
Harry Cohen: To ask the Secretary of State for Work and Pensions (1) what estimate he has made of the percentage of final salary which would be provided for a personal account saver for (a) men, (b) women and (c) all people on average earnings throughout their working lives; [216839]
(2) what estimate he has made of the percentage of final salary from average earnings at which the income from personal account saving would provide an income above the level of the basic state pension. [215367]
Mr. Mike O'Brien: Personal accounts and other private pensions are not intended to give an income instead of the basic state pension. Any income from private pension saving—in an occupational defined benefit or defined contribution scheme—will be in addition to state pension entitlements.
A male median earner, who, from age 22 in 2012 to state pension age, works and saves in an occupational defined contribution pension at the minimum level set out under reform—4 per cent. from the individual, 1 per cent tax relief and 3 per cent. from the employer on banded earnings between around £5,000 and £33,000—can expect to receive a gross weekly private pension of around £80 in today's earnings terms (roughly equivalent to the level of the basic state pension), and a total net weekly income of £224. His replacement rate from saving would be 50 per cent., an improvement of around 15 percentage points from saving.
A female median earner, with the same work and savings history, can expect to receive around £55 gross weekly private pension, and a total net weekly income of £202. Her replacement rate from saving would be 57 per cent., an improvement of around 12 percentage points from saving. Her replacement rate from the state pension system is higher than that of the previous example reflecting the fact that her state pension entitlement will be the same as that for the male median example, but the earnings with which they are compared will be lower.
A male average earner, again with the same work and savings history, can expect to receive around £72 gross weekly private pension, and a total net weekly income of £216. The replacement rate from saving would be 53 per cent., an improvement of around 14 percentage points from saving.
Note:
These examples assume male median earnings of £24,440, female median earnings of £19,240 and average earnings of £22,360. For all examples, an annual management charge of 0.5 per cent, and phasing over a three year period are assumed. The whole of the pension pot is annuitised using gender-specific RPI-linked annuities for the male and female earners and a male RPI-linked annuity for the average earner. All figures are in 2007-08 earnings terms. The replacement rates shown are higher than the 45 per cent targeted by the Pensions Commission for lifetime median earners as they refer to saving from age 22 rather than from around age 30 as used by the Pensions Commission.
Personal Accounts: Females
Harry Cohen: To ask the Secretary of State for Work and Pensions based on average earnings during a working life and a final salary level of average earnings for women who take (a) three years, (b) four years, (c) five years and (d) six years out of their working life for child rearing, what percentage of final salary would be provided for a personal account saver; and if he will provide the percentage assuming (i) return to full-time working and (ii) two years on top of the time out at half-pay for part-time working. [218701]
Mr. Mike O'Brien: A female median earner, who, from age 22 in 2012 to state pension age, works and saves in an occupational defined contribution pension at the minimum level set out under reform—4 per cent. from the individual, 1 per cent. tax relief and 3 per cent. from the employer on banded earnings between around £5,000 and £33,000—can expect to receive around £55 gross weekly private pension, and a total net weekly income of £202. Her overall replacement rate would be 57 per cent.
The following table shows the expected gross weekly private pension, total net weekly income and replacement rate for a female median earner, with the same work and savings history apart from taking three, four, five or six years out of their working life to raise children and then:
(i) returns immediately to full-time work;
(ii) works part-time for two years before returning to full-time work.
Post Office Card Account
Jim Cousins: To ask the Secretary of State for Work and Pensions how much and what proportion of each type of state benefit payable to residents in the City of Newcastle upon Tyne was paid into Post Office card accounts in each of the last five years. [219093]
Mr. Plaskitt: The answer is not available in the precise format requested. The following table shows the number and percentage of state benefit payments paid into Post Office card accounts in the City of Newcastle upon Tyne in each of the last five years.
| December 2003 | December 2004 | December 2005 | December 2006 | December 2007 | ||||||
| Total | % | Total | % | Total | % | Total | % | Total | % | |
| Notes: Information Directorate 1. Numbers are rounded to the nearest 10, percentages to the nearest whole percent. 2. Totals may not sum due to rounding.. 3. Figures refer to payment accounts. Claimants with more than one account will be counted for each account. Figures only relate to accounts live and in payment on the specified date. 4. Child Benefit is administered by HM Revenue and Customs and War Pensions are administered by MOD. These benefits have therefore been excluded. Source: DWP. | ||||||||||
| Next Section | Index | Home Page |