Asked by: Lord Davies of Brixton (Labour - Life peer)
Question to the Department for Work and Pensions:
To ask His Majesty's Government, given the figures for the consumer prices index and national average earnings indices, and the percentage increases in those indices that are published by the Office for National Statistics, how each of those figures are used to determine increases in state pensions, including what rules are used to round the relevant figures.
Answered by Baroness Sherlock - Minister of State (Department for Work and Pensions)
The Social Security Administration Act 1992 requires the Secretary of State for Work and Pensions to review State Pension and benefit rates each year to see if they have retained their value in relation to the general level of prices or earnings. Where the relevant State Pension or benefit rates have not retained their value, legislation provides that the Secretary of State is required to, or in some instances may, up-rate their value. Following this review, State Pension and benefit rates are increased in line with statutory minimum amounts and others are increased subject to Secretary of State’s discretion.
Although the statutory minimum for the increase in basic State Pension and the full rate of the new State Pension is at least the growth in earnings, the Government has a manifesto commitment to up-rate those benefits using the Triple Lock (the highest of the growth in prices, average earnings or 2.5%) throughout this Parliament.
The percentage rate chosen in the Secretary of State’s Review is applied to the current full weekly rates of the basic and new State Pensions. The resulting amounts are rounded to the nearest 5p. This results in a percentage rate which is applied to each individual’s existing pension payment.
The Triple Lock does not apply to other elements of the State Pension – such as the additional State Pension, Protected Payments, deferred increments and other elements. These are all up-rated by prices (CPI). After applying the CPI percentage to the amounts in payment, the resulting weekly amount is rounded to the nearest penny for these components.
The Office for National Statistics will publish the average weekly earnings (AWE) figure for year to May to July 2025 on 14 October and the consumer price index (CPI) for year to September 2025 on 22 October. This year’s up-rating review will commence once the ONS figures for AWE and CPI are released and will conclude at the end of November.
Asked by: Lord Davies of Brixton (Labour - Life peer)
Question to the Department for Work and Pensions:
To ask His Majesty's Government, following the introduction of means-testing for the Winter Fuel Payment, what administrative arrangements they are making to deal with any increase in claims for Pension Credit; what assessment they have made of the impact of an increase in claims for Pension Credit on the processing of existing claims; and how many current civil servants are being redeployed and how many additional staff are being employed to handle an increase in claims for Pension Credit.
Answered by Baroness Sherlock - Minister of State (Department for Work and Pensions)
The Department has secured funding for additional staffing to assist with the processing of the additional Pension Credit claims being made. We have recently published Weekly Pension Credit claims received from 1 April 2024 to 22 September 2024 - GOV.UK www.gov.uk which provides the number of Pension Credit claims received by the department. We are deploying over 500 additional staff to cover the expected increase in Pension Credit applications and will endeavour to process claims as soon as possible.
Asked by: Lord Davies of Brixton (Labour - Life peer)
Question to the Department for Work and Pensions:
To ask His Majesty's Government what estimate they have made of the projected savings from the introduction of means testing on the Winter Fuel Payment in the event that the number of those claiming Pension Credit increases from its current level (1) to 80 per cent, and (2) to 90 per cent, of those eligible.
Answered by Baroness Sherlock - Minister of State (Department for Work and Pensions)
No such estimate has been made. Final savings will be certified and published by the Office for Budget Responsibility after the Autumn Budget on 30th October, taking account of any behavioural response and the estimated numbers of people who will receive Pension Credit in the upcoming years.
Asked by: Lord Davies of Brixton (Labour - Life peer)
Question to the Department for Work and Pensions:
To ask His Majesty's Government how they arrived at their estimate that the introduction of means testing for the Winter Fuel Payment will result in savings of £1.5 billion in the current financial year, and what is the itemised breakdown of these calculations.
Answered by Baroness Sherlock - Minister of State (Department for Work and Pensions)
Estimated savings that result from the introduction of means testing for the Winter Fuel Payment are sensitive to the forecasted take-up of Pension Credit. Final savings will be certified and published by the Office for Budget Responsibility after the Autumn Budget on 30 October 2024, taking account of any behavioural response and the estimated numbers of people who will receive Pension Credit in the upcoming years.
Asked by: Lord Davies of Brixton (Labour - Life peer)
Question to the Department for Work and Pensions:
To ask His Majesty's Government, following the Written Answer by Viscount Younger of Leckie on 24 April (HL3731), what discussions officials have had with occupational pension schemes and their advisers about the flaws in climate scenario modelling by pension schemes and the impact on beneficiaries, whether as part of the post-implementation review of the Occupational Pension Schemes (Climate Change Governance and Reporting) Regulations 2021 or otherwise.
Answered by Viscount Younger of Leckie - Shadow Minister (Work and Pensions)
It has not proved possible to respond to this question in the time available before Prorogation. Ministers will correspond directly with the Member.
Asked by: Lord Davies of Brixton (Labour - Life peer)
Question to the Department for Work and Pensions:
To ask His Majesty's Government whether they will update statutory guidance on climate risk management, as part of their review of climate risk reporting requirements which was due to take place in the second half of 2023 or otherwise; and in particular whether any updated guidance will take account of the report of the Institute and Faculty of Actuaries and the University of Exeter Climate Scorpion – the sting is in the tail published in March.
Answered by Viscount Younger of Leckie - Shadow Minister (Work and Pensions)
My Lords, we are undertaking a post-implementation review of the Occupational Pension Schemes (Climate Change Governance and Reporting) Regulations 2021. We aim to conclude the review this year.
We recognise that recent reports, including “Climate Scorpion-the sting is in the tail” have shown the limitations of the models currently available for scenario analysis. Therefore, we welcome work within the industry to ensure that scenario analysis models are decision useful and will look to acknowledge the issue in the review.
However, we do not believe that the Government should mandate which models should be used by Pension Schemes. It is important that modelling which takes into account of ESG is allowed to develop and evolve as data availability increases.