Gregg McClymont

The government believes people should be trusted to make their own choices about how to use their savings to fund their retirement. These measures fundamentally change the way that people can access their retirement savings, and therefore people are free to vary the mix of income and capital they hold in retirement.

Alongside these changes, the government is taking measures to ensure everyone approaching retirement is aware of the choices they have. Pension providers and schemes will be required, by April 2015, to offer all individuals retiring with a defined contribution pension pot free and impartial face-to-face guidance on their retirement choices.

There has been no delay to the default fund charge cap. The Government has announced that it will put in place a charge cap set at 0.75% of funds under management for the default funds of all schemes used for automatic enrolment from April 2015. This means we will deliver on the timetable in our consultation document to have a full cap for all qualifying schemes in place by April 2015.

Table below shows the total number of Pension Trace requests and those which were successful. Successful Pension Traces are where we are able to provide a customer with contact details of the pension administrator for the particular company or employer they had worked for.

Source:

The data is from the Pension Tracing System

No such estimate has been made.

The single-tier pension will be set above the level of the Standard Minimum Guarantee for a single person. This means that for people reaching State Pension age from April 2016 onwards, anyone who has built up 35 qualifying years through National Insurance contributions and credits should have an income above the level of the basic means test, regardless of how much they earned during their working life.

Some pensioners will still require means-tested support, and at a given level of retirement income an individual's eligibility will depend on a number of factors. These include the level and nature of their housing costs, whether they are single or in a couple, whether they have additional needs associated with caring or severe disability and whether they reached State Pension age before or after the introduction of the single-tier pension.

Whether or not a particular salary level in working life would lead to an income in retirement that is high enough to avoid eligibility for any means-tested benefits will also depend on the choices an individual makes, including how much of their income to save for retirement.

We already have powers in place to legislate to ban cash incentive transfers. The incentive exercises code of good practice was created in 2012, and set out seven key principles that pension providers and their advisers must adhere to if they wish to offer their members incentives, including ensuring that members are given sufficient information to enable them to make an informed decision.

A large number of providers and independent financial advisers have signed up to the code, delivering a prompt solution to address this issue. The Government would encourage all providers to comply with the code.

Following the Budget announcement HM Treasury are currently running a consultation, “Freedom of Choice in Pensions” where it is considering whether people with a defined benefit pension should be allowed to transfer their accrued benefits into a defined contribution scheme. The outcome of this consultation will inform our thinking on what additional action, if any, the Government should take to restrict or ban pension providers from offering incentives

Estimates were made of both the future AME expenditure and the revenue from contributions in 2015-16 and 2016-17 which would determine future state pension expenditure levels. Estimates made by the Department were certified by the Office for Budget Responsibility. Figures for the medium term impacts in cash terms were published on page 46 in Budget 2014: policy costings available at:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/295067/PU1638_policy_costings_bud_2014_with_correction_slip.pdf .

Further information on the long-term Exchequer impact in 2013-14 price terms is included in the table below. As noted in the policy costings document, there is uncertainty about levels of take-up of this policy. If take-up was higher than assumed both AME and Revenue would increase and if take-up was lower than assumed then both would decrease.

Notes to table: Figures are in £m, 2013-14 price terms, rounded to nearest £5m.

The Budget announced that from April 2015, the tax rules for how people access their defined contribution pension savings will be simplified to allow individuals aged 55 or over to withdraw their savings however they wish, subject to their marginal rate of income tax.

Allowing individuals to exercise greater choice over how they access their retirement savings may mean that some people who would have previously chosen to opt out may no longer do so. This is more likely to have an effect on the choices of older workers.

The investment strategy for the National Employment Savings Trust (NEST) is the responsibility of the NEST Trustees who will consider, if in the best interests of their members, there needs to be any change in NEST's investment approach.

The Pensions Advisory Service provides information and guidance over multiple distribution channels including by telephone, web chat, online and written enquiries and face to face via outreach activity. The outreach activity includes shows, forums and similar events. All guidance is tailored to the individuals' personal circumstances.

The data for the last five years are set out in the table below:

Estimates were made of both the future AME expenditure and the revenue from contributions in 2015-16 and 2016-17 which would determine future state pension expenditure levels. Estimates made by the Department were certified by the Office for Budget Responsibility. Figures for the medium term impacts in cash terms were published on page 46 in Budget 2014: policy costings available at:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/295067/PU1638_policy_costings_bud_2014_with_correction_slip.pdf .

Further information on the long-term Exchequer impact in 2013-14 price terms is included in the table below. As noted in the policy costings document, there is uncertainty about levels of take-up of this policy. If take-up was higher than assumed both AME and Revenue would increase and if take-up was lower than assumed then both would decrease.

Notes to table: Figures are in £m, 2013-14 price terms, rounded to nearest £5m.

As announced in the Budget 2014, the maximum amount of additional State Pension that individuals can obtain under the State Pension top-up scheme (Class 3A) will be £25 per week. We intend to make details available shortly of the contribution rates by age for each £1 per week of additional pension.

The information requested is not available. The Childcare and Early Years Survey of Parents estimates that grandparents provided informal childcare for 1.8m children in 1.4m families in 2012/13 with 4% of these families making some form of payment to the grandparent. We are unable to identify the ages of these grandparents; previous studies have shown that around half of grandparents are aged over 65.

Source for grandparent age distribution:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/220274/eia-ni-credits-changes.pdf

Source for Childcare and Early Years Survey of Parents:

https://www.gov.uk/government/publications/childcare-and-early-years-survey-of-parents-2012-to-2013

Over the three year contract term it is estimated that there is a minimum £8.9m saving to the public purse when comparing the contract cost with an in house provision.

Regular consultation took place between HMRC and staff representatives throughout the process up to the point the decision was made to go out to tender for a provider of scanning services to HMRC.

The timetable for implementation is still being finalised, HMRC does not yet have details of how and when teams currently handling post will be impacted.

As requested please find detailed below staff numbers employed in HMRC Regional Post Rooms employed solely in post room activities.

Shipley 45

Cardiff 65

Bootle 35

Newcastle 98

Cumbernauld 46

I also refer the Honourable Gentleman to my answer on 12 May 2014.

HM Revenue and Customs (HMRC) has no plans to privatise its Debt Management and Banking (DMB) Operations.

HMRC has been using debt collection services provided by private sector suppliers for several years. This has given HMRC additional capacity to complement its in house operations and increase the flexibility of its business operations, with Debt Collection Agencies (DCAs) working alongside in house debt collection activity.

HMRC plans to continue to use private sector services - the overall aim being to strengthen further HMRC's debt collection service, making optimal use of both internal and external collection specialists.

In the future, HMRC will purchase those externally provided services through the Debt Market Integrator (DMI), a Cabinet Office led initiative to create a “one stop shop” for all government departments to access a range of private sector debt collection services.

HMRC does not hold data on the total number of letters issued demanding payment of an established and overdue tax debt over the last five years.

HM TREASURY

Gregg McClymont MP

CUMBERNAULD, KILSYTH AND KIRKINTILLOCH EAST

To ask Mr Chancellor of the Exchequer, what comparative analysis he has carried out of the effects of the changes to pensions set out in the 2014 Budget on men and women. [195427]

DAVID GAUKE

At Budget 2014 the Chancellor announced changes which increase the flexibility of pensions, some of which took effect on 27^th March 2014.

The increases to the small pot and trivial commutation limits are believed to benefit women proportionately more than men, as they are more likely to have smaller pension wealth. Reducing the minimum income requirement for flexible drawdown is also expected to have a disproportionate impact on women, as they are less likely to have a large pension pot than men.

HMRC's Tax Information and Impact Note presents further information on the estimated impacts of the 2014 changes:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/293844/TIIN_8070_8062_8202_8132_8133_increasing_pension_flexibility.pdf

The proposed 2015 changes will enable individuals to access their defined contribution pension savings as they wish at the point of retirement, subject to their marginal rate of income tax (rather than the current 55% charge for full withdrawal). The changes the Government proposes will entitle everyone to full flexibility regardless of their gender.

HM TREASURY

MP Gregg McClymont MP

CUMBERNAULD, KILSYTH AND KIRKINTILLOCH EAST

To ask Mr Chancellor of the Exchequer if he will publish an impact assessment of planned changes to pensions from 2015 as announced in the 2014 Budget 195423

DAVID GAUKE

The expected Exchequer impacts over the forecast period of the changes made to private pensions taxation as announced at Budget 2014 were included in the Taxes Information and Impact Note “Increasing Pension Flexibility” published on 19 March 2014 and can be found in Table 2.1 (p.56) of the Red Book.

The Treasury announced in paragraph 1.13 of “Freedom of Choice in Pensions” that “it intends to publish draft legislation for a short technical consultation prior to the introduction of the legislation that will enact the changes from April 2015”. A consultation impact assessment will be published alongside this draft legislation.

HM TREASURY

Gregg McClymont MP

CUMBERNAULD, KILSYTH AND KIRKINTILLOCH EAST

To ask Mr Chancellor of the Exchequer, how many people made the maximum allowed contribution to an ISA in each of the last three years; and how many he estimates will do so in each of the next three years as a result of changes announced in the 2014 Budget. 195422

DAVID GAUKE

In 2010-11, around 1.2 million individuals made full use of their (£10,200) ISA allowance. Figures for more recent years are not yet available.

As announced at Budget 2014, from 1 July 2014 the overall annual New ISA subscription limit will be increased to £15,000 and can be used for either cash or stocks and shares investments, or any combination of the two, up to this limit. Over 6 million people are expected to benefit from these increases, including over 5 million adults currently making full use of the cash ISA limit.

Estimates of the numbers of individuals expected to save at the new limit in each of the next three years are not available.

This measure fundamentally changes the way that people can access their retirement savings, and so depending on the decisions they make, people may increase or decrease their chances of being eligible for means tested services at some point in their retirement. We will ensure that the relevant guidance, including where necessary the guidance on deliberate deprivation of capital, is updated before the new flexibilities are implemented in April 2015.

HMRC does not hold data on the total number of letters issued demanding payment of an established and overdue tax debt since April 2011. Each taxpayer with an established and overdue debt may receive several letters requesting payment.