Asked by: Baroness Altmann (Conservative - Life peer)
Question to the Department for Work and Pensions:
To ask Her Majesty's Government what assessment they have made of (1) the number of women who did not receive the automatic uplifts to their State Pension under the rules applying from 17 March 2008, and (2) the number of women who failed to claim uplifts due prior to March 2008.
Answered by Baroness Stedman-Scott
1) On the 4 March, I laid a written statement (UIN HLWS818) to inform the House that the Department had formally commenced a State Pension correction exercise on 11 January 2021. The estimates around the number of individuals effected by this issue are highly uncertain and will be continuously revised as the correction activity progresses.
2) No assessment has been made.
Asked by: Baroness Altmann (Conservative - Life peer)
Question to the Department for Work and Pensions:
To ask Her Majesty's Government what reporting they require from (1) pension providers, (2) employers, and (3) payroll operators, to verify the accuracy of auto-enrolment pension contributions; and what steps they (a) have taken, or (b) plan to take, to ensure that pension contribution records are routinely (i) checked, and (ii) reconciled, for auto-enrolment data errors each year.
Answered by Baroness Stedman-Scott
Automatic enrolment has been a great success, with over 10 million employees enrolled and more than 1.7 million employers having met their duties to date. Government has put in place a robust, proportionate compliance framework. This is administered by The Pensions Regulator (TPR), and includes detailed regulatory guidance about how to comply with the law. An employer is required to select a qualifying pension scheme; enrol qualifying staff into that scheme, and deduct any contributions payable under automatic enrolment.
Employers as well as the trustees or managers of pension schemes must keep certain records including details of the pension contributions payable in each relevant pay reference period by an employer to the scheme. This includes the contributions due on the employer’s behalf and deductions made from an individual’s earnings. As part of the Regulator’s guidance, employers and pension scheme trustees or managers must hold information about payment schedules and contributions for six years, except for opt-outs which must be kept for a minimum of four years.
TPR has published codes of practice on its website setting out how trustees of defined contribution pension schemes and managers of personal pension schemes should monitor the payment of contributions, provide information to help members check their contributions and report material payment failures to TPR. As part of TPR’s codes of practice and guidance, there is a requirement for scheme providers to have sufficient monitoring processes in place. This includes having a risk based approach to monitor employers who should have in place appropriate internal controls to ensure correct and timely payment of contributions due to meet their employer duties. If the trustee or manager becomes aware that this is not the case, or that the employer does not appear to be taking adequate steps to remedy the situation, for example where there are repetitive and regular payment failures, then it must be reported to TPR. The responsibility lies with the employer to ensure their payroll processes are correct whether in house or outsourced. TPR’s compliance checks include checks of employer payroll processes and detailed reviews of payroll software. TPR does hold payment failure reports from pension providers but these do not necessarily represent data errors.
In addition, TPR publishes regular assessments of its automatic enrolment compliance and enforcement activities as well as an annual commentary and analysis report, both of which are available on its website.
Asked by: Baroness Altmann (Conservative - Life peer)
Question to the Department for Work and Pensions:
To ask Her Majesty's Government what assessment they have made of (1) the number of women who did not receive an automatic uplift to their State Pension under the 2009 pension rule changes, and (2) the number of women who did not claim pension uplifts that they were due prior to 2009.
Answered by Baroness Stedman-Scott
There has been no assessment of the numbers requested since there was no such State Pension rule change in 2009.
Asked by: Baroness Altmann (Conservative - Life peer)
Question to the Department for Work and Pensions:
To ask Her Majesty's Government, further to the Written Answer by Baroness Stedman-Scott on 16 October (HL8845), what adjustments are made to ensure fairness of treatment between those pension contributions made under net pay arrangements and relief at source pension contributions when calculating the earnings figure used for Universal Credit entitlement.
Answered by Baroness Stedman-Scott
It remains the policy, when assessing entitlement to Universal Credit, that all contributions to personal and occupational pension schemes are deducted from the calculation of earnings in the same way as any National Insurance or income tax paid in the assessment period. This ensures equity of treatment of pension contributions in the calculation of Universal Credit.
Asked by: Baroness Altmann (Conservative - Life peer)
Question to the Department for Work and Pensions:
To ask Her Majesty's Government, further to the Written Answer by Baroness Stedman-Scotton 16 October (HL 8845), what are the Universal Credit earnings for a claimant earning £1,000 a month and paying £100 a month in relievable pension contributions into (1) a net pay arrangement pension scheme, and (2) a relief at source pension scheme.
Answered by Baroness Stedman-Scott
Pension contributions are not used in the calculation of earnings. The earnings figure used in the calculation of UC entitlement is gross earnings less any occupational or personal pension contributions, tax and National Insurance contributions. From this figure any applicable work allowance and the earnings taper is applied to establish the amount of earnings to be used for a claimant in the calculation of their UC award.
Asked by: Baroness Altmann (Conservative - Life peer)
Question to the Department for Work and Pensions:
To ask Her Majesty's Government whether the Department for Work and Pensions grosses up the net amount of relief at source pension contributions, taken from HMRC Real Time Information data, before deducting those contributions from Universal Credit claimants' earnings.
Answered by Baroness Stedman-Scott
The earnings figure used in the calculation of Universal Credit entitlement is gross earnings: gross taxable pay minus income tax, National Insurance contributions, and ignoring 100 per cent of contributions made to an occupational or personal pension. Adjustments are made to ensure fairness of treatment between those pension contributions made under net pay arrangements and relief at source pension contributions.
Asked by: Baroness Altmann (Conservative - Life peer)
Question to the Department for Work and Pensions:
To ask Her Majesty's Government whether an individual’s pension contributions to a relief at source pension scheme reported to HMRC via Real Time Information are automatically deducted from the claimant’s earned income figure when calculations are made regarding their Universal Credit entitlement.
Answered by Baroness Stedman-Scott
Pension contributions made by a claimant to a relief at source pension scheme, reported via Real Time Information, are automatically deducted from the earnings used to calculate their Universal Credit award.
Asked by: Baroness Altmann (Conservative - Life peer)
Question to the Department for Work and Pensions:
To ask Her Majesty's Government, further to reports that women have received incorrect State Pension payments based on their husband’s record, what assessment they have made of the numbers of women who did not receive automatic uplifts to their State Pension under the post-2008 rules; and what has been their assessment of why the automatic uplifts were not paid.
Answered by Baroness Stedman-Scott
As has been the case under successive governments of different political persuasions. Those who are already getting a State Pension based on their own National Insurance contributions must make a separate claim for the top up if their husband reached State Pension age before 17 March 2008.
Any women who believe they are being underpaid State Pension should contact the Department. Details on how to do this through the Pension Service are available on the Gov.uk website.
We are checking to find other individuals who may have been affected.
Asked by: Baroness Altmann (Conservative - Life peer)
Question to the Department for Work and Pensions:
To ask Her Majesty's Government what estimate they have made of the cost to the Exchequer for each of the next 20 years of increasing state pensions by the best of price or earnings inflation in place of a triple lock.
Answered by Baroness Stedman-Scott
The table below provides the estimated cost to the Exchequer for each of the next 20 years of increasing state pensions by the best of price or earnings inflation (‘double lock’) in place of a triple lock.
The figures assume that the change in uprating happens from 2023/24. They are based on analysis done in 2018, so they do not take into account any impacts of covid-19.
| Expenditure Prices (£billion) as a percentage of GDP | |
Financial Year | Double Lock | Triple Lock |
2020/21 | 4.6 | 4.6 |
2021/22 | 4.7 | 4.7 |
2022/23 | 4.7 | 4.7 |
2023/24 | 4.7 | 4.7 |
2024/25 | 4.8 | 4.8 |
2025/26 | 4.9 | 4.9 |
2026/27 | 4.9 | 4.9 |
2027/28 | 4.7 | 4.8 |
2028/29 | 4.8 | 4.8 |
2029/30 | 4.9 | 4.9 |
2030/31 | 5.0 | 5.0 |
2031/32 | 5.1 | 5.2 |
2032/33 | 5.2 | 5.3 |
2033/34 | 5.3 | 5.4 |
2034/35 | 5.4 | 5.5 |
2035/36 | 5.5 | 5.6 |
2036/37 | 5.6 | 5.7 |
2037/38 | 5.6 | 5.7 |
2038/39 | 5.6 | 5.7 |
2039/40 | 5.7 | 5.7 |
2040/41 | 5.7 | 5.8 |
Source: DWP modelling. The figures include the cost of the State Pension. They do not include the cost of Pension Credit or other pensioner benefits.
Asked by: Baroness Altmann (Conservative - Life peer)
Question to the Department for Work and Pensions:
To ask Her Majesty's Government what estimate they have made, if any, of the costs of uprating the Pension Credit by the triple lock over the next 20 years, instead of uprating by earnings.
Answered by Baroness Stedman-Scott
No estimate has been made on the cost of uprating the Pension Credit by the triple lock over the next 20 years, instead of uprating by earnings.