Oral Answers to Questions
Laura Trott Excerpts(1 year, 3 months ago)
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Samantha Dixon (City of Chester) (Lab)
The Parliamentary Under-Secretary of State for Work and Pensions (Laura Trott)
In April, the state pension saw its largest ever rise of 10.1%, thanks to the triple lock protecting pensioners.
Gerald Jones
We know that 770,000 pensioners are eligible for pension credit but are not receiving it. A few months ago, I joined my local citizens advice bureau to organise a pension credit action day. As a result, an additional £200,000 was drawn down to people across Merthyr Tydfil and Rhymney. The Government have the data and could take a much more targeted approach to get eligible people to apply, so why have they not taken that action? When will we see more action from the Government?
Laura Trott
I thank the hon. Gentleman for the work he is doing in his constituency. I assure him that that is exactly what the Government are doing. We recently launched an “invitation to claim” trial, which has been rolled out in 10 constituencies and is using housing benefit data to target those who might also be eligible for pension credit. We will report back on the results of that trial later this year.
Samantha Dixon
It might be hard to imagine on a sunny day like today, but winter is just around the corner. The reality for many worried pensioners in my constituency is that this winter there will be a choice between heating and eating. We have a Government who are tiptoeing around the real issues while our constituents struggle to make ends meet. When will the Government make a real plan to tackle the cost of living crisis and implement meaningful action to help thousands of pensioners in poverty?
Laura Trott
With respect to the hon. Lady, that is exactly what we are doing. That is why we have put the cost of living payments in place, which are worth £900 to all those on pension credit, and why a cost of living pensioner payment worth £300 is coming out in the winter. All the while the Labour Mayor of London is charging pensioners £12.50 when they want to drive to the hospital.
Bob Blackman (Harrow East) (Con)
Clearly, there is a stigma attached to claiming pension credit, because this is on poorer pensioners who desperately need the money. What action can my hon. Friend take to remove that stigma? My constituency has recently been added to the pilot, and I am looking forward to its results, because elderly people deserve to get the money they need to fulfil their lives.
Laura Trott
My hon. Friend is absolutely right on that, and I praise all the work he has done in his constituency on pension credit. We are trying to do exactly what he sets out: encourage as many people as possible to claim this important benefit, at a time when they are going to need it most. I note that across the House good work has been done in individual constituencies.
Matt Rodda (Reading East) (Lab)
As inflation rises, being able to top up pension contributions is vital for many part-time workers, who would otherwise not be able to claim the full state pension. However, a Daily Mail investigation showed that the Government are failing to accurately record people’s top-up contributions. Pensioners are terrified that their money has simply disappeared, so when will the Government get a grip of this terrible problem? When will Ministers show that they understand the pressure on families and pensioners due to the cost of living crisis?
Laura Trott
With the comprehensive package of support I have talked about today, we have shown that we are taking action during the cost of living crisis to help pensioners as much as we can. We know that accuracy is the most important thing when it comes to the state pension, which is why we have taken action very quickly to correct issues where they have occurred, for example, with LEAP—the legal entitlement and administrative practices exercise. We will do the same in all such cases.
Vicky Ford (Chelmsford) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Laura Trott)
The DWP has conducted an extensive campaign across TV, radio and social media, and with partner organisations, to boost pension credit take-up, with a number of pushes being made before cost of living payment deadlines. I am pleased to tell the House that that is working; applications were up by 75% in the year to May.
Vicky Ford (Chelmsford) (Con)
One of my Chelmsford constituents sent me a message that has been circulating recently. It suggests that asylum seekers are entitled to receive more in benefits than pensioners; I believe that is not accurate. For the record, will the Minister confirm what support is available for pensioners, compared with that for asylum seekers?
Laura Trott
Let me reassure my right hon. Friend and her constituents that asylum seekers are given no recourse to public funds. They are given payment for their food and shelter, but they are unable to claim benefits. Pensioners in her constituency will receive a state pension, if they qualify, which for the first time is worth on average more than £200 per week or over £10,000 a year. Pensioners who have not built up sufficient contributions may be eligible for pension credits, worth on average £3,500 per year, to top up their income. They are also eligible to receive the cost of living payment, if they ever receive pension credit, and the pensioner cost of living payment.
Cat Smith (Lancaster and Fleetwood) (Lab)
Over the summer, I held events in villages across Wyre in my constituency. I was approached by many pensioners who are suffering because of the cost of living crisis; pension credit is just not plugging the gap. At my “Chat with Cat” event in Pilling, a constituent asked me why 400,000 more pensioners are living in poverty than when Labour left office. Will the Minister answer that question?
Laura Trott
There are 200,000 fewer pensioners in absolute poverty than when Labour left office.
Sarah Green (Chesham and Amersham) (LD)
Wendy Chamberlain (North East Fife) (LD)
The Parliamentary Under-Secretary of State for Work and Pensions (Laura Trott)
In April, we announced plans to address this issue by introducing a retrospective national insurance credit, which will ensure that more people—especially women—have the opportunity to obtain a full state pension.
Wendy Chamberlain
The high income child benefit charge is potentially a scandal waiting to happen. Currently, families have to apply for a benefit they know they are not entitled to so that the stay-at-home parent—usually the mother—gets the national insurance credits that they need for her state pension. It is good to hear that the Government are doing something, but they need to reform the process further. Will they agree to at least put some comms in? I certainly had not heard of the changes in April.
Laura Trott
I am glad that the hon. Lady agrees with those changes. I assure her that we will be bringing them forward as soon as we can.
Alexander Stafford (Rother Valley) (Con)
Liz Twist (Blaydon) (Lab)
The Parliamentary Under-Secretary of State for Work and Pensions (Laura Trott)
The hon. Lady asked about this last time, and I believe I informed her previously that all alive people will be receiving the benefits they are entitled to by the end of this year.
Theresa Villiers (Chipping Barnet) (Con)
Simon Jupp (East Devon) (Con)
I warmly welcome the considerable progress this Conservative Government have made in supporting pensioners. The triple lock and targeted support with the cost of living are welcome in my part of Devon. Will my hon. Friend outline how this Conservative Government will ensure that this great progress continues?
Laura Trott
The triple lock was a Conservative invention. It was a pledge in our manifesto and the Secretary of State will be looking at it again this year when he makes his decision on benefits.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
Alison Thewliss (Glasgow Central) (SNP)
A constituent of mine has a small work pension, rendering her ineligible for pension credit yet still struggling to get by. Another constituent who is 80 and misses out on pension credit by just £10 has contacted me several times angry and hurt that he now has to pay for his TV licence. Will Ministers review the rules on pension credit, because ineligibility for so many of the passported benefits leaves many of my constituents out of pocket? They want to be eligible for it but are not.
Laura Trott
Obviously this is without looking at the individual case, but it is important to note that the threshold has gone up significantly, so it is worth questioning whether the hon. Lady’s constituents are now eligible. If not, applications to the household support fund can be helpful, and local councils may be able to offer housing benefit support. If there is an individual case that she would like to write to me about, I am happy to respond.
Mr Speaker
That completes the questions. Those who wish to leave should do so.
Work and Pensions
Laura Trott Excerpts(1 year, 5 months ago)
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Laura Trott
We expect that the connection timetable in guidance will continue to prioritise large schemes with the greatest number of members for the first connections. It is also important to note that the dashboards’ available point—the point at which dashboards will be available for widespread public use—could happen before the October 2026 connection deadline in the regulations. The connection timetable set out in guidance will require scheme trustees or managers to have regard to the guidance; not doing so would be a breach of the regulations.
[Official Report, First Delegated Legislation Committee, 3 July 2023, Vol. 735, c. 4.]
Letter of correction from the Under-Secretary of State for Work and Pensions, the hon. Member for Sevenoaks (Laura Trott):
An error has been identified in my opening speech.
The correct information should have been:
Laura Trott
We expect that the connection timetable in guidance will continue to prioritise large schemes with the greatest number of members for the first connections. It is also important to note that the dashboards’ available point—the point at which dashboards will be available for widespread public use—could happen before the October 2026 connection deadline in the regulations. Trustees and managers will be expected to demonstrate how they have had regard to the timeline set out in guidance; not doing so would be a breach of the regulations.
Draft Pensions Dashboards (Amendment) Regulations 2023
Laura Trott Excerpts(1 year, 5 months ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Laura Trott)
I beg to move,
That the Committee has considered the draft Pensions Dashboards (Amendment) Regulations 2023.
It is a pleasure to serve under your chairmanship, Mr Robertson.
The draft regulations were laid before the House on 18 June. I am pleased to introduce this statutory instrument, which removes the staging profile from the Pensions Dashboards Regulations 2022 and introduces a single connection deadline of 31 October 2026 for relevant occupational pension schemes to connect to the pensions dashboards.
The successful introduction of automatic enrolment more than a decade ago, combined with a trend towards people working multiple jobs in their lifetime, has seen a substantial increase in pension pots. Research published by the Pensions Policy Institute estimates that there were 8 million deferred pots in 2020 and that, without intervention, that number is likely to rise to 27 million by 2035. Pensions dashboards will help hard-working savers to locate pension pots that they have accumulated over time, reconnecting them with lost and forgotten pots, supporting better planning for retirement. People will be able to deal with their various pensions, including their state pension, securely in one place online.
There can be no doubt that pensions dashboards have the potential to change the pensions landscape, but delivering dashboards for widespread use efficiently and securely is a complex undertaking. We anticipate that, once all schemes in scope of the draft regulations are connected, the pension records of more than 71 million memberships from relevant occupational pension schemes and providers of Financial Conduct Authority-regulated entities will be accessible to people at the touch of a button at a time of their choosing.
The reason for the draft regulations is that, at the end of last year, the pensions dashboards programme, which is responsible for delivering the digital architecture that underpins pensions dashboards, informed the Department for Work and Pensions that more time was required to complete the build of the digital architecture. The PDP faced several key issues: the technical solution had not been sufficiently tested and there was still work to do to finalise the necessary supporting documentation and to get the necessary systems in place to support industry with the connection process. It was concluded that more time was needed to deliver dashboards successfully and that a reset of the programme was required.
In my written statement in March 2023, I announced the delay and set out that the pensions dashboards programme would be reset to get it back on the path for successful delivery. Following the announcement, my Department engaged with a broad cross-section of industry and gave assurance that it would legislate at the earliest possible opportunity to provide certainty to schemes.
Since then, we have been examining several challenges facing the pensions dashboards programme. The decision to pause, review and reset the programme is providing the time to ensure complete delivery of the ecosystem and supporting documentation before industry begins to connect. So far, the reset has assessed the digital architecture and no fundamental issues have been identified. That has provided reassurance to Government to move forward with amending the regulations.
The staging profile in schedule 2 to the 2022 regulations set out the order in which different types of schemes, categorised by size and type, would connect to pensions dashboards. The 2022 regulations, however, did not provide the flexibility necessary to deliver a programme of this magnitude: a digital undertaking that will enable users to search more than 3,000 schemes to find their pensions. The draft instrument curtails the period of uncertainty for the pensions industry. As the staging profile in the 2022 regulations required the first schemes to connect at the end of August 2023, the amendment regulations were laid to avoid any perception that schemes are in breach through no fault of their own.
The draft instrument uses powers in the Pensions Act 2004 to amend the 2022 regulations to compel all schemes in scope to connect to dashboards by 31 October 2026. At the same time as providing more flexibility than is available in the 2022 regulations, retaining the broad framework of a phased approach will continue to help manage the flow of connections and maximise the coverage as early as possible. Government will work with key partners and the pensions industry on a connection timetable to be published in guidance.
We expect that the connection timetable in guidance will continue to prioritise large schemes with the greatest number of members for the first connections. It is also important to note that the dashboards’ available point—the point at which dashboards will be available for widespread public use—could happen before the October 2026 connection deadline in the regulations. The connection timetable set out in guidance will require scheme trustees or managers to have regard to the guidance; not doing so would be a breach of the regulations.
While the instrument amends the requirements on trustees or managers by the removal of schedule 2, there are no other material changes to the 2022 regulations. The amendment regulations will facilitate a collaborative approach to connection that delivers on our commitment to introduce pension dashboards.
I am satisfied that the draft regulations are compatible with the European convention on human rights. Pension dashboards have the potential to transform retirement planning forever, and the regulations are another step in the right direction.
Laura Trott
As ever, I am grateful for the constructive approach taken by all parties. To address some of the issues that were raised, as I said in my speech, using guidance will allow for extra flexibility. Under these regulations, the regulator will ensure that schemes have regard to the guidance. That is really important and a key part of what we are trying to do. If for whatever reason the schemes breach that significantly, we may have to come back and revisit it, but I do not anticipate that that will happen. The Pensions Regulator will keep that under review, but it is significant that the ABI said that it will comply anyway. From conversations that I have had with the industry, that is absolutely the intent, but as I said the regulator is on hand and will issue guidance to ensure compliance.
I am confident about the October 2026 deadline. Everything that we are trying to do is about putting that confidence in place and ensuring that we have a programme that is overseen by a joint delivery board from the DWP and by the Money and Pensions Service, that we have regular interactions, and that it is keeping to time and to the outline. That is part of what the reset programme is trying to do. Total costs have decreased during the standard assessment period. Transitional costs for industry have increased to reflect that some schemes may face additional costs ahead of the proposed changes, but that does not offset the overall decrease in total costs over the 10-year period, and the dashboards programme has run slightly under budget to date. From a cost-to-industry perspective, the overall benefits far outweigh the costs, and from a scheme perspective I am confident that it is keeping to its outline budget, although we will continue to keep that under review.
On the AE extension, I will not miss an opportunity to praise my hon. Friend the Member for Stoke-on-Trent North (Jonathan Gullis), who has done a fantastic job. Hopefully his Bill will go quickly through the other place, and I promise to get the consultation on the regulations out as quickly as I can, to ensure that we get it moving through. We need to evaluate the impact of Stronger Nudge so far, and then base any next steps on that.
I think that that covers everything, but Members are welcome to intervene if not. I commend the draft regulations to the Committee.
Question put and agreed to.
Private Pension Schemes: Regulation
Laura Trott Excerpts(1 year, 6 months ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Laura Trott)
I congratulate the right hon. Member for North Durham (Mr Jones) on securing the debate and I thank all hon. Members who have contributed to it.
It is absolutely vital that pension savers have confidence in the running of their pensions, as we have discussed this evening. Employers and trustees must be open and transparent with their pension scheme members, and be absolutely clear when they make changes to the benefits members will receive or how they are able to take their pensions.
Savers in defined-benefit schemes are in entirely advantageous positions, which is why the Government require specialist advice to be sought in advance of anyone wanting to transfer significant savings out of a defined-benefit scheme and into a defined-contribution scheme.
It is equally important that when members opt to make changes to the way they receive their benefits, or indeed any pensions, they can access the information and guidance they need to understand what the implications of that would be. It is extremely concerning that there seems to have been a lack of communication, as the right hon. Gentleman outlined. It is of course the case that many schemes offer members a number of choices of how to take their benefits, such as partly in a lump sum if the scheme rules and tax rules permit it. In these cases, the scheme rules detail the calculations to be used, and the trustees can change the details of the scheme rules if they are able to do so within the scheme.
Although legislation is silent on the way in which these rules and calculations must operate, there are safeguards for members. Trustees, as discussed, have a duty to act in the interest of all members rather than of any particular group, and to do so they must take into account a range of factors. They will, for example, take into account the funding position of the scheme to protect the interests of current and future members and may make changes to the shape of benefit arrangements in the pursuit of that goal provided that the scheme rules allow it. Trustees should also work closely with the scheme actuary to ensure that all members get a fair value from the commutation arrangements. But— this is the key point of the debate today—it is crucial that each member has sufficient information before deciding whether alternative arrangements, such as taking a lump sum, are the best course of action for them. If members feel that they were given incorrect or insufficient information to make an informed choice, or if the trustees did not act according to the scheme rules, then they can take their complaint to the pensions ombudsman.
The right hon. Gentleman said that he wrote to the regulator and to the ombudsman and both referred him to the other, and he asked what redress there is for members in this situation. Let me clarify the role of the two organisations. The Pensions Regulator is the UK regulator of workplace pension schemes. It makes sure that employers put their staff into a pension scheme and pay money into it. It also makes sure that workplace pension schemes are run properly, so that people can save for their later years. Its focus is on the running of those pension schemes, trustees and scheme managers. There are duties on those parties and those working with them, including to report breaches to the regulator.
The pensions ombudsman, on the other hand, adjudicates on disputes between pension schemes and their members, as we are discussing in this case. If members of any scheme would like help in understanding options for retirement income and any documentation they have received for their scheme, I encourage them in the first instance to contact MoneyHelper, which is provided by the Money and Pensions Service, an independent, non-departmental public body.
Julie Elliott (Sunderland Central) (Lab)
Many dozens of my constituents are affected by the Nissan pension scheme. We have discussed in this debate the role of the ombudsman. The answer the ombudsman has given in this case is entirely unsatisfactory, and I know that all my constituents affected think so too. What was the Minister’s view of the ombudsman’s response in this case?
Laura Trott
I will come to that in a moment. If the hon. Lady thinks I have not answered her question properly, then she is very welcome to intervene again.
As I was saying, the Money and Pensions Service is an independent, non-departmental public body, which provides a free information and guidance service to the public on all matters related to workplace and personal pension schemes. In this case, I understand that in determining one case—not the individual case of Mr Steve Clare, but a case relating to identical issues in the Nissan pension plan—the ombudsman noted that the plan members were presented with an illustration of future benefits and options in retirement. However, if that was not the case—and certainly from the speech of the right hon. Member for North Durham that is not what appears to have happened—I ask him to provide me with all the details that he has and I will raise it directly with the ombudsman myself and provide a copy of the response.
Ben Everitt
That is exactly the case, certainly for one of the two constituents I have been contacted by. Further to that, the word they use in their correspondence to me is that they were “encouraged” to take out a lump sum. To me, that goes beyond giving information and crosses over potentially into giving advice. Given that that advice was not in their best interest, because it has affected their pension so disastrously—to the tune of more than £100,000—is there a case for looking at the regulatory side, rather than the ombudsman, in relation to the advice that has been given?
Laura Trott
It is absolutely correct that scheme members should have received an illustration, as discussed. If that was not the case, that is something we need to pursue. If instead they received advice that was indeed misleading, that should absolutely be taken up with the ombudsman and, where necessary, the regulator. Again, if my hon. Friend would like to pass me any information he has on that case, I will take it up directly with the ombudsman.
Mr Kevan Jones
I am not aware of any illustrations being given, but, if they were, that illustration would also have had to explain to individuals where the lump sum was coming out of and its impact on future increases on the pension. I shall do more research and talk to people, but I am not aware that that type of detail was ever explained to people, as the hon. Member for Milton Keynes North (Ben Everitt) said.
Laura Trott
The right hon. Gentleman is right that that should have happened; if it did not happen, that is a matter for the ombudsman. That is what I think we need to pursue following this debate. He is also absolutely right that those changes should have been communicated clearly and directly, to allow people to plan properly for retirement.
I am about to sum up, so if anyone else would like to intervene, please do. Otherwise, I just want to say that I am of course happy to discuss the matter further with the right hon. Gentleman, and indeed with anybody else who would like to take it up with me. I commend him once again for bringing this very important matter to the attention of the House.
Question put and agreed to.
Oral Answers to Questions
Laura Trott Excerpts(1 year, 6 months ago)
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Elliot Colburn (Carshalton and Wallington) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Laura Trott)
Last week was pension credit awareness week, which follows our big push ahead of the cost of living payments. As a result of that and the national advertising campaign, I am pleased to say that pension credit applications up to May were 75% higher than the year before.
Elliot Colburn
I am grateful for that excellent news. As part of that awareness week, I wrote to older people in Carshalton and Wallington to inform them of the credit, as thousands of people living in my constituency who are eligible for it sadly do not claim it. I sincerely hope we see some good numbers from that. Does my hon. Friend agree that public awareness must happen at both local and national level? I extend an invitation to her to come down to Carshalton and Wallington and see some of the amazing work being done, including at the older persons fair later this year.
Laura Trott
What an invitation—I would be delighted to attend. I commend my hon. Friend on all his work in his constituency. Older persons fairs are important and effective. I held a pension credit one on Friday in Swanley, and I recommend them to Members.
Matt Rodda (Reading East) (Lab)
Sadly, the figures also show that hundreds of thousands of pensioners are still missing out on pension credit. To make matters worse, this large group of pensioners is also missing out on the Government’s £900 cost of living payment, because receiving pension credit acts as a gateway to other help. Could the Minister explain why the Government designed their cost of living payments in that way? Could she explain what she will do to fix the problem, which the Government themselves created?
Laura Trott
I am sure that the hon. Gentleman will welcome the figures that I just announced on the uptake of pension credit. We will not have the eligibility figures for a while—hopefully, they will be out later this year. I hope we will see a rise, but in the meantime we are doing all we can—as I know is true across the House—to get as many people as possible to apply for pension credit so that they qualify for those important cost of living payments.
Nigel Mills (Amber Valley) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Laura Trott)
The Pension Protection Fund publishes data on the funding of defined-benefit pension schemes. Average funding of the schemes was 113.1% in 2022 versus 104.3% in 2010—a significant improvement.
Nigel Mills
Does the Minister accept that we have spent 20 years—probably quite rightly—working out how we get more money into pension schemes to pay for the promise, and that now we need to work out what we do with the money in there that is in excess of what we need? Does she accept that in those 20 years we have seen pension funding increase probably at the expense of current workers, who get a much lower pension? Is there anything we can do to use the surplus to support the pension incomes in retirement of those current workers who will get a far less generous pension?
Laura Trott
As I would expect from a member of the Work and Pensions Committee and the head of the all-party parliamentary group on pensions, my hon. Friend makes an interesting point. In my time as pensions Minister I have tried to reduce the gap between DB and defined contribution pensions. I would be interested to talk to him about any further suggestions.
Nick Smith (Blaenau Gwent) (Lab)
Clear, accessible pension schemes information was a priority for former Chancellor George Osborne in 2016, but the pensions dashboard programme has consistently missed its deadlines to go live. This month the Minister announced a further delay, with a new connection deadline of October 2026. Could she please explain this consistent failure to meet delivery dates?
Laura Trott
We are absolutely committed to the pensions dashboard programme. October 2026 is the final deadline for connection, not the point that it is necessarily available to the public. The dashboard availability point could come earlier than that, and I hope that it will.
David Linden (Glasgow East) (SNP)
Last week, I was in Aberdeen to attend the annual conference of the Scottish Pensioners’ Forum and outline why we think an independent Scotland would be the best place to grow old. In contrast, at the weekend, the former Tory leader William Hague wrote in the papers that his party should abandon the triple lock. Is that why pensioners are now supporting independence more than ever?
The Parliamentary Under-Secretary of State for Work and Pensions (Laura Trott)
I do not think they are. Also, the triple lock is very proudly a Conservative policy.
Nigel Mills (Amber Valley) (Con)
With interest rates looking to hit around 6%, are the Government considering making the support for the mortgage interest scheme a little more generous, perhaps by raising the cap or the interest rate, so that it provides the safety net that people expect?
Stephen Morgan (Portsmouth South) (Lab)
Laura Trott
I am sure the hon. Gentleman will note that pensioner poverty has gone down by 200,000 in absolute terms since 2010. I point him to the record state pension increase, the record rise in pension credit and the pensioner cost of living payments, as well as to the fact that Labour’s record on this issue was a decimation of private pensions and a 75p rise.
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
Office for Nuclear Regulation: Corporate Plan 2023-2024
Laura Trott Excerpts(1 year, 6 months ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Laura Trott)
Later today, I will lay before this House the Office for Nuclear Regulation’s corporate plan 2023-2024. This document will also be published on the ONR website.
I can confirm, in accordance with paragraph 25(3) of schedule 7 to the Energy Act 2013, that there have been no exclusions to the published documents on the grounds of national security.
[HCWS846]
Pensions Dashboards
Laura Trott Excerpts(1 year, 6 months ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Laura Trott)
Pensions dashboards will transform the way in which people plan for retirement. On 2 March 2023, I announced that the pensions dashboards programme would require additional time to deliver the connection of pension providers and schemes, in accordance with the connection deadlines set out in the Pensions Dashboards Regulations 2022 and the Financial Conduct Authority’s corresponding pensions dashboard rules.
More time is needed to deliver this complex build, and for the pensions industry to help facilitate the successful connection of a wide range of different IT systems to the dashboards digital architecture. As part of our reset of the pensions dashboard programme, I am today laying amending regulations with a new approach to delivery that allows us to work more collaboratively with the pensions industry. Rather than setting out the entire staging timeline in legislation, we will instead set this out in guidance which we will collaborate on with industry this year. This will give the pensions dashboards programme the flexibility it needs to ensure this complex project is completed effectively.
In recognition that the requirement to connect to the digital architecture should remain mandatory, we will include a connection deadline in legislation of 31 October 2026. This is not the dashboards available point—the point at which dashboards will be accessible to the public —which could be earlier than this.
The Government remain as committed as ever to making pensions dashboards a reality and we are ambitious about their delivery. I am confident that this reappraised approach will enable us to make significant progress on delivering dashboards safely and securely, enabling consumers to take advantage of their benefits to plan for retirement.
[HCWS836]
Terminal Illness: Early Access to Pensions
Laura Trott Excerpts(1 year, 7 months ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Laura Trott)
It is a pleasure to serve under your chairmanship, Mr Sharma. We have been discussing a very sensitive issue, and I thank the hon. Member for Angus (Dave Doogan) for bringing forward the debate, and all hon. Members for their contributions.
The Government remain committed to ensuring that all citizens can live with the dignity and respect they deserve. I think it would help if I first set out the principles behind the state pension, which is the foundation of state support for older people. In 2016, the system was reformed, with the introduction of the new, simpler and more straightforward state pension as the basis for private saving, to which people can add throughout their lives.
The state pension is a contributory social benefit, financed through the national insurance fund. The national insurance system operates on a pay-as-you-go basis, meaning that today’s contributors are paying for today’s social security entitlements and pensions, while those who paid contributions in the past were paying for the pensions of that time. In other words, the contributors to the national insurance system do not accumulate an individual pot of money that is personal to them.
People’s national insurance contributions do not just pay for the state pension. They also entitle them—or, in certain circumstances, their spouses—to contributory social security benefits such as unemployment and bereavement benefits, which are available on the basis of the rules applicable at the time the claim is made, and about 20% of national insurance contributions are paid into the NHS. Therefore, it is a question not so much of a person paying for their own benefits, but of a general pooling of resources to meet current benefit claims for all those covered by the national insurance system.
A person’s contributions are geared towards liability to pay rather than any likelihood of future benefit entitlement. In that sense, it is similar to income tax rather than a private insurance or pension scheme. It has always been an overriding principle of the national insurance system that liability to contribute exists, whether or not those contributions will eventually give entitlement to a particular benefit. That is very different from private pensions, where a person builds up a pool that is specifically theirs, and where different laws rightly exist.
Therefore, early access to a state pension would not be appropriate in the case of terminally ill people, but there are a variety of other benefits available to them. For those nearing the end of their life, significant support is already available through the welfare system. Hearing that an illness cannot be cured must be a frightening and devastating experience, and I pay tribute to the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) for all his work on that with the APPG. Our priority within the DWP is providing people with financial support quickly and compassionately. The main way we do that is through the special benefit rules, which have been mentioned today and which are sometimes referred to as the special rules. They give people nearing the end of their life faster and easier access to certain benefits, without their needing to attend a medical assessment or serve waiting periods. In most cases, people will receive the highest rate of benefit.
Changes to the special rules mean that thousands of people nearing the end of their life will be able to claim fast-tracked financial support from the benefits system six months earlier than they were able to previously. Historically, people had to be assessed by their healthcare professional as having six months or less to live. That is known as the six-month rule, which the hon. Member for Inverness, Nairn, Badenoch and Strathspey referred to. In July 2021, the Government announced that they intended to replace the six-month criteria with a 12-month, end-of-life approach. Last April, the Department made those changes to the special rules for eligibility for universal credit and employment and support allowance. In April 2023, the Department made similar changes for PIP, disability living allowance and attendance allowance. Those changes have been welcomed—as they have been today—by the key charities active in the area, by the public and by parliamentarians.
I will now expand on my earlier remarks on early access to state pension. Unlike a personal or workplace pension, which can potentially be drawn earlier, it has always been the case that nobody can claim their state pension before they reach state pension age. There are a wide range of working-age benefits available to support people who are below state pension age . Removing the clear boundaries between working-age and pensioner benefits would create complexity and confusion. This is not simply a monetary issue.
As an example of the complex issues relating to early access, the value of an individual’s state pension is based on their contribution record. Is the intention here to base it on the contribution record of those who are, sadly, at the heart of today’s debate? If the value of that state pension, based on the person’s record, is deficient, would they be entitled to means-tested pension credit? If they took their state pension early, would it need to be actuarially reduced to reflect that? Early access actually means lowering the age of entitlement to state pension. At what age would it be set for this group? Would it be 16, in line with the age—
Drew Hendry
I appreciate the Minister’s position, but I am not sure that many people who are terminally ill, or those who work with them, will be comforted by the technicalities she is laying out. She is laying out the rules as they stand, but does she see no opportunity for things to be adjusted so that the entitlement age for those who are terminally ill could be adjusted, as it is in other countries? Is there no opportunity or intention for the UK Government to look at that?
Laura Trott
The Department’s position is that help is available through benefits other than the state pension. The state pension is not an entitlement pool that exists; it is done on a pay-as-you-go basis. Of course, it is different from private pensions, which I will come to in a second, and there is more that we could do on that front to make the situation easier and more straightforward.
I of course accept the sentiment on which this proposal is based—that those who are terminally ill should be financially supported—but grounding this support on the state pension system, because it is there, does not make for a practical proposition, and that is in addition to my earlier points on the nature of the state pension.
Hon. Members will be aware that the second Government review of state pension age was published on 30 March 2023. The Government noted the independent report’s recommendations on the rise from 67 to 68, but highlighted that Baroness Neville-Rolfe was unable to take into account the long-term impact of recent significant external factors, bringing uncertainty to the data on life expectancy, the economic position and labour market.
I raise that point because, as part of that process, independent reviewers looked at early-access policies that would allow variation in state pension age for certain groups. John Cridland covered that in his 2017 independent review of state pension age. More recently, Baroness Neville-Rolfe, in her independent review, recommended that the Government should look at such a scheme for people who had spent long periods of their lives doing physical work.
However, both reviewers recognised the real, practical difficulties of designing and delivering such a scheme. We are aware that when and why people leave the labour market will vary and will be affected by a host of factors, including their national insurance record, savings, health, caring responsibilities and other factors. It would be impossible to take account of all those factors in setting the state pension age or to create rules for one particular group that would be fair to others. In addition, the Government are mindful of the fact that a universal state pension age has many benefits, including giving a clear signal to those planning for retirement.
Private pensions are very different. Through automatic enrolment, we have extended pension saving, so more individuals will have access to choices at retirement, with more than 10.8 million people automatically enrolled into a workplace pension as of March 2023. If someone has a defined benefit private or workplace pension, they may be able to begin taking an income and/or lump sums from their pension at any age due to ill health. That provision is dependent on the rules of the scheme.
In addition, the generous tax benefits of saving into a defined contribution pension provide individuals with the ability to accrue savings for their retirement and provide them with freedom and choice about how they access them. Individuals can normally access those savings, without penalty, from age 55. However, to address the point made by the shadow Minister, the hon. Member for Reading East (Matt Rodda), they may be able to access their pension as a lump sum from any age if the scheme administrator has received evidence from a registered medical practitioner that the member is expected to live for less than one year.
The hon. Member for Rutherglen and Hamilton West (Margaret Ferrier) raised a specific example of where there were difficulties. I would be grateful if she would write to me about that, and we can see whether there is anything we can do to help.
The hon. Member for Reading East raised some points on energy. The energy price guarantee has been extended for an additional three months at its current level, from April to the end of June. That will bring a typical household energy bill for dual-fuel gas and electricity down to around £2,500 per year in Great Britain and around £2,109 per year in Northern Ireland.
In conclusion, I have set out the range of support that the Government provide for people with terminal illnesses. Although I of course have the greatest sympathy for anyone in that position, the Government do not believe that adjusting the state pension system to support that group is the right approach, although early access to private pensions is obviously a different matter.
Oral Answers to Questions
Laura Trott Excerpts(1 year, 7 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Justin Madders (Ellesmere Port and Neston) (Lab)
The Parliamentary Under-Secretary of State for Work and Pensions (Laura Trott)
You will notice, Madam Deputy Speaker, that I am not the Secretary of State. He sends his apologies as he is currently travelling back from the G7 in Japan, but we will endeavour to do a reasonable job in his absence.
Pre-1997, as the hon. Gentleman knows, occupational pension defined-benefit schemes were not required to be indexed. I emphasise that defined-contribution schemes, which most people are on today, are also, obviously, not required to be indexed.
Justin Madders
As we know, inflation is racing ahead at the moment, and more and more pensioners who are members of occupational pension schemes with pre-1997 service that has not been index linked, and those who are part of the Pension Protection Fund, are noticing the difference. Will the Department carry out an audit of how many people are being affected by those rules, and by how much?
Laura Trott
Those rules were in place for a large period of the last Labour Government, and if Labour Members were interested in changing them, I suggest they should have done so at the time.
Samantha Dixon (City of Chester) (Lab)
The Parliamentary Under-Secretary of State for Work and Pensions (Laura Trott)
In 2022, there were 200,000 fewer pensioners in absolute poverty than in 2010.
Holly Lynch
Mr Brooke from my constituency is nearly 70. He contacted me when his application for pension credit was rejected on the basis that he is £2.55 over the threshold, which rules him out of not only pension credit but any other associated benefit. Mr Brooke signed off his letter to me saying:
“I just can’t afford to live. Yours, Truly Broken”.
What are this Government doing to help people such as Mr Brooke in that incredibly difficult position?
Laura Trott
I appreciate the hon. Lady’s raising that case. I encourage her—I am sure she has already—to check whether her constituent would be eligible for housing benefit in her constituency. That is not necessarily linked to pension credit, although it automatically passports. We are doing other things to support pensioners in those situations—the pensioner cost of living payment was received by 8 million pensioner households over the winter, and will be repeated this year.
Patricia Gibson
The UK already has the lowest state pension as a proportion of pre-retirement wages in north-west Europe. Independent Age has highlighted that 5% of pensioner couples and 19% of single pensioners have no source of income other than state pension or any associated potential benefits. Will the Minister finally take action to address pensioner poverty and shockingly low state pensions relative to most of Europe?
Laura Trott
We challenge those figures, as the hon. Lady knows. I point her to the record increase in state pension that we have just introduced—10.1% for both the state pension and pension credit. That will make a real difference to pensioner poverty levels, alongside the cost of living payments that are going out this year—£900 for pensioners on pension credit and £300 for all pensioner households.
Samantha Dixon
Two weeks ago I visited West Cheshire Foodbank in my constituency, where volunteers told me that for the first time a couple who were both pensioners had turned up in tears because they could not afford the cost of living and the basics. The Government have failed to fix the issues with pension credit uptake, with over a third of those entitled not claiming. Given that there are 400,000 more pensioners in poverty today than when Labour left office, why should the pensioners forced to visit the food bank in Chester trust a Government who have repeatedly let them down?
Laura Trott
I am sorry to hear about the pensioners involved. If they are eligible for pension credit and not claiming, I assume the hon. Lady is helping them. As a Department we are happy to give any assistance to those individuals. We are doing all we can to boost pension credit uptake. There was a campaign before Christmas, which I am sure she was part of, to get people to claim the cost of living payment, which we will repeat this year. We saw a 177% increase in claims just before Christmas. There will also be the pension credit week of action for the summer on 12 to 16 June, which I hope many hon. Members will take part in.
Sir Desmond Swayne (New Forest West) (Con)
Ministers agitated for us all to get involved in the campaign to extend the uptake of pension credit. Has the Minister any innovative plans that will make it easier for us to do so, such as toolkits and the like?
Laura Trott
Absolutely. I am also looking at what more we can do to use data from housing benefit and from His Majesty’s Revenue and Customs to make it easier to target people for a claim. Working together, we can make a real difference in the number of pension credit claimants in this country.
Kevin Foster (Torbay) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Laura Trott)
This month, pensioners received the largest ever cash increase to the state pension and pension credit. In addition, all pensioner households will receive a £300 cost of living payment. The Government are committed to helping pensioners with the cost of living.
Kevin Foster
I thank the Minister for her answer. One of the best ways to help pensioners with the cost of living is to ensure that everyone claims the pension credit to which they are entitled. What work is she doing to engage with the high street banks on their more vulnerable customers who are over the state pension age, both to identify those who might be missing out and to facilitate applications for pension credit, which can make a vital difference?
Laura Trott
My hon. Friend is right to highlight the vital role that high street banks play in interacting with vulnerable pensioners and vulnerable customers. Organisations such as Virgin Money and HSBC have worked to promote pension credit uptake. I will be working with them and a variety of other stakeholders as we build up to the cost of living payment deadline on 19 May and the inaugural DWP pension credit awareness week on 12 to 16 June.
Douglas Chapman (Dunfermline and West Fife) (SNP)
Pension credit continues to be a serious issue, with £1.7 billion going unclaimed each year. Will the Minister introduce an effective strategy in the coming year, perhaps following some of the initiatives we see in Scotland, to make sure everyone gets what they are entitled to in these very difficult times?
Laura Trott
The Department for Work and Pensions is straining every sinew because this is incredibly important to us, and to me. We need to make sure we are doing all we can to reach those vulnerable customers. We have done a nationwide advertising campaign, which the hon. Gentleman may have seen. We are doing a lot in the build-up to 19 May, and I want to work with everyone in the House to make sure we use Members of Parliament as much as possible to reach out to vulnerable pensioners in our constituencies.
Laura Trott
Labour put up pensions by 75p. We put them up by nearly £20. We are doing all that we can to support pensioners, and they know that we have got their backs.
Marsha De Cordova (Battersea) (Lab)
Ian Byrne (Liverpool, West Derby) (Lab)
Some 5,260 women in Liverpool, West Derby have been affected by the changes made to the women’s state pension age, and many have contacted me about the devastating impact it has had on their lives. What consideration has the Minister given to early-day motion 1040 by my right hon. Friend the Member for Knowsley (Sir George Howarth), which calls for an alternative dispute resolution process, including representatives of the 3.8 million women affected, to address the injustices they have been through?
The Parliamentary Under-Secretary of State for Work and Pensions (Laura Trott)
The hon. Gentleman will know that state pension age equalisation has been the policy of successive Governments since 1995.
Kevin Foster (Torbay) (Con)
Liz Twist (Blaydon) (Lab)
Laura Trott
We have massively increased the number of people working on that at the moment. We are undertaking work against scams, we are prioritising cases in which the recipient is alive, and we will try to get that done by the end of the year. I am accelerating that as much as I can. I am very aware that it is a problem.
Henry Smith (Crawley) (Con)
Laura Trott
I thank my hon. Friend for all that he is doing to encourage pension credit take-up in Crawley. The Government have undertaken a sustained communications campaign to raise awareness of pension credit and promote its take-up. The latest stats release at the start of the year shows a substantial rise in the number of claims.
Wendy Chamberlain (North East Fife) (LD)
My constituent had a brain injury 20 years ago and was receiving personal independence payment for care and mobility support. A recent review said that there was no change to his condition, but somehow the decision has been made to stop his benefits. The Minister has already indicated that he is considering this matter, but will he meet me to discuss that particular case?
Pensions (Extension of Automatic Enrolment) (No. 2) Bill
Laura Trott ExcerptsFriday 24th March 2023
(1 year, 8 months ago)
Commons ChamberRead Full debate Pensions (Extension of Automatic Enrolment) Act 2023 View all Pensions (Extension of Automatic Enrolment) Act 2023 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 15 March 2023 - (15 Mar 2023)
The Parliamentary Under-Secretary of State for Work and Pensions (Laura Trott)
I begin by congratulating my hon. Friend the Member for Stoke-on-Trent North (Jonathan Gullis), and my hon. Friend the Member for North West Durham (Mr Holden) before him, on successfully piloting this Bill through all its stages in this House. Their efforts will improve the retirement aspirations for millions in the UK, from young people starting work at 18 with a pension for the first time, to those already in a workplace pension who will now build pension savings from the first pound of their earnings.
I acknowledge the support of Members across the House in progressing this legislation. The shadow Minister, the hon. Member for Wirral South (Alison McGovern), is right that there has been broad consensus on workplace pensions since the pensions commission. It is a testament to the importance that we all place on delivering improved retirement outcomes for our fellow citizens.
A lot has been achieved in the last decade of the reforms, as has been mentioned numerous times. More than 10 million people have been automatically enrolled into a workplace pension. More than 2 million employers are paying into employees’ pensions for the first time. My hon. Friends the Members for Crewe and Nantwich (Dr Mullan) and for Darlington (Peter Gibson) are right that it has been embraced by employers, and we should celebrate that. An additional £33 billion in real terms was saved into workplace pensions in 2021 compared with 2012. As has been mentioned, it has been especially transformative for women, low earners and young people, who historically have been poorly served by, or excluded from, workplace pensions. The Bill sets us on a path to do more for all those groups, who will benefit from increased saving in retirement, with many gaining access for the first time to employer contributions.
In Committee I spoke about the legislative powers in the Bill, and the duty placed on Government to consult on how we make the changes through regulations—both the approach to implementation and the timetable for doing so. We will report to Parliament on the outcome of that consultation before bringing forward the necessary secondary legislation, which will also be debated in this House. I look forward to engaging with hon. Members on those details, to ensure that the expansion of automatic enrolment is done in the right way for employers, workers and taxpayers.
To answer some of the shadow Minister’s questions directly, we will work closely with employers and trade unions throughout the consultation process. I have committed previously to launching the consultation in the autumn. I am not in a position to give an exact date, but I assure the hon. Member that I will push as hard as I can to get that as early as possible. Communicating to young people is incredibly important. Once we are through the consultation stage and we have a timeline for when we can make progress, we will work up a plan, and I will return to the House on that. On a timetable for the legislation to come into force, the commitment has previously been the mid-2020s, and that is what we will continue to say. We will have more of an idea once we have done the consultation process. I hope that answers all her questions.
In conclusion, it is to the huge credit of my hon. Friend the Member for Stoke-on-Trent North that he successfully introduced the Bill on a cross-party basis and navigated its passage—[Interruption.] There is a first time for everything. I am delighted to say that the Government support the Bill and will continue to support it as it moves through Parliament. I wish it every success.