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25 Feb 2003 : Column 489W—continued

Pension Schemes

Mr. Willetts: To ask the Secretary of State for Work and Pensions what his latest estimate is of the cost to employers of following the full buy-out option contained in paragraph G33 of "Simplicity security and choice" technical paper published on 17 December 2002, if all pension schemes were to wind up. [96608]

Mr. McCartney: Within the Green Paper, "Simplicity, security and choice: working and saving for retirement" (Cm 5677), we are seeking views on two options for strengthening protection for members

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whose solvent employer decides to wind up their pension scheme. These are the "full buy-out" option and the "partial buy-out" option.

The Partial Regulatory Impact Assessment in "Simplicity, security and choice" technical paper contains the latest estimate of costs for these options, a copy of which is available in the Library of the House.

Pensioners Abroad

Mr. Willetts: To ask the Secretary of State for Work and Pensions for what reason British pensioners living abroad are facing a delay in receiving their state retirement pension. [99070]

Mr. McCartney: This is a matter for Alexis Cleveland, Chief Executive of The Pension Service to reply. She will write to the hon. Member.

Letter from Alexis Cleveland to Mr. David Willetts, dated 24 February 2003:








Pneumoconiosis Benefit

Adam Price: To ask the Secretary of State for Work and Pensions how many claims for pneumoconiosis benefit have been received in Wales in the last two years; and how many are outstanding. [96264]

Mr Nicholas Brown: The latest available information is in the table.

Estimated number of claims for Industrial Injuries Disablement Benefit from pneumoconiosis sufferers in Wales
2000–01900
2001–011,100

Notes:

1. Figures are rounded to the nearest hundred and may be subject to a degree of sampling variation.

2. Information is not currently available on the number of claims outstanding.

Source:

10 per cent. sample of annual statistical returns from Disablement Benefit offices taken in March 2001 and March 2002.


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State Pension

Mr. Webb: To ask the Secretary of State for Work and Pensions if he will estimate the cost to the Exchequer, net of savings in means-tested benefits and of additional income tax revenue, of an increase of £5 per week in the basic state pension together with the introduction of age additions of £5 per week at age 75–79 and £10 per week at age 80 years and over, on the basis that the age additions for those aged 75 to 79 and 80 years and over are paid in full, regardless of contribution record. [92156]

Mr. McCartney: Our priority is to target help on those current pensioners who have the lowest incomes. While it is true that older pensioners tend to be poorer on average, income inequality is far more pronounced across the whole pensioner population than between pensioners of different ages. For example, the median net income of the richest fifth of pensioner couples is around four times that of the poorest fifth.

Age additions are not the most effective way to target those pensioners with the lowest incomes. For example, just under half of all minimum income guarantee claimants are aged under 75.

As a result of the minimum income guarantee, no pensioner need live on less than £102.10 a week and a couple on less than £155.80 per week from April 2003. All pensioners receiving MIG will be at least 21 per cent. better off in real terms as a result of MIG rises compared to 1997, with the youngest households gaining as much as one third. Following the introduction of pension credit, the average pensioner household will be over £1,150 per year better off due to Government measures introduced since 1997 and the poorest third of pensioners will be over £1,500 per year better off.

In addition to extra help for the poorest pensioners, the Government is committed to providing support for all pensioners throughout retirement. From April 2003 the full basic state pension will increase to £77.45 a week—an increase of 7 per cent. in real terms since 1997. Since 1997 the Government has also doubled winter fuel payments to £200, guaranteeing this for the rest of this Parliament, and has introduced free TV licences for those aged 75 and over. Both of these measures are helping pensioners regardless of their income.

If the maximum rate payable of the basic state pension was increased by £5 per week and weekly age additions of £5 were introduced for people aged 75–79 and £10 for people aged 80 and over in 2003–04, we estimate that the increase in public expenditure could be around £2.6 billion. This is calculated on the generous assumption that consequent savings in other benefits and any additional tax yield are channelled back into the basic state pension.

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Mr. Webb: To ask the Secretary of State for Work and Pensions if he will estimate by how much it would be possible to raise the basic State Pension for the over-75s on a revenue neutral basis, and taking account of offsetting savings in expenditure on means-tested benefits and enhanced income tax revenue, if he were not to introduce the pension credit and were instead to spend the money on the state pension for the over-75s. [92153]

Mr. McCartney: Increasing the basic State Pension for those aged 75 and over would not target resources on those who are most in need. While it is true that older pensioners tend to be poorer on average, income inequality is far more pronounced across the whole pensioner population than between pensioners of different ages. For example, the median net income of the richest fifth of pensioner couples is around four times that of the poorest fifth.

If Pension Credit was not introduced and expenditure re-directed into the basic State Pension for those aged 75 and over in 2004–05, the maximum rate payable of the basic State Pension for those aged 75 and over could be increased from around £79 per week to around £98 per week and all other payments increased proportionately. This increase would only be possible on the generous assumption that savings from other benefits and any additional tax yield were channelled back into the basic State Pension for those aged 75 and over.

We estimate that the poorest third of pensioners could be around £130 a year better off under Pension Credit than if the maximum rate payable of the basic State Pension was increased to £98 per week for those aged 75 and over and Pension Credit abolished in 2004–05.

In this scenario, the only gainers from increasing the maximum rate payable of the basic State Pension and abolishing Pension Credit would be pensioners aged 75 and over. Among those aged 75 and over, the biggest gainers would be those higher up the income distribution.

Pension Credit has been designed to be simpler, fairer and less intrusive for pensioners than the Minimum Income Guarantee. We are designing the application process to be simpler including the use of the telephone for most applications. The capital rules excluding pensioners with savings of £12,000 or more from any

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help have been removed. Pensioners will have to report fewer changes to their circumstances and most will have their Pension Credit award fixed for five years.










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