UK Parliament / Open data

Pensions Bill

Proceeding contribution from Lord Freud (Conservative) in the House of Lords on Wednesday, 8 January 2014. It occurred during Debate on bills and Committee proceeding on Pensions Bill.

Rather than going into the sub-detail of what is already a very detailed point, I ought to commit to getting whatever information we can find and supplying that by letter to the noble Baroness.

When pension sharing disappears, most men and women will be able to build up entitlement to a simple contributory pension above the basic level of means-tested support. This is the most effective way of ensuring that savers have a decent underpin which stays with them however their family circumstances change. More than 80% of those reaching state pension age by the mid-2030s will get the full single tier, a figure with which I know the Committee is familiar. The courts will still be able to take account of private pension provision in the divorce settlement. The expectation is that the vast majority of people will be able to build a single-tier pension in their own right.

If someone is the beneficiary of a pension share order they receive a pension credit. The person the order is made against is subject to a corresponding debit. State pension credits are normally awarded and debits applied from state pension age. If the order is made after state pension age, the payment is increased or decreased at that point. As under the current system, single-tier pensioners who have a state pension debit or credit will be informed of the weekly addition or deduction when the court order is implemented. Individuals will be able to ask for statements of their state pension, but the pension credits or debits would be consolidated within the individual’s single-tier payment or protected payment and so not identified as credits or debits. As now, these elements could be identified on request but I am informed by the department’s pension sharing administrators that no one can recall ever receiving such a request.

On communications, the question raised by the noble Lord, Lord Browne, our statements will give individuals an up-to-date picture of their single-tier state pension position, which includes their foundation amount, and explain how this may change with further national insurance qualifying years through work or credits. The foundation amount included in statements will take into account any pension share debits or credits, as I have said.

Let me make it clear that state pension sharing on divorce affects relatively few people. As I said, in 2012-13 the department implemented only around 150 sharing orders. The changes to the computer system necessary to generate such automatic annual statements would therefore be disproportionately costly to provide this group with information it can in any case request.

Finally, on the devolution issue raised by the noble Lord, Lord Browne, I can confirm that this does not require a legislative consent Motion from the Scottish Government.

I hope that I have been able to go some way in reassuring the noble Baroness that, while there is low demand for this information, it is available if requested. I hope that on that basis, she will feel able to withdraw the amendment.

About this proceeding contribution

Reference

750 cc383-4GC 

Session

2013-14

Chamber / Committee

House of Lords Grand Committee

Legislation

Pensions Bill 2013-14
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