Pension Credit

Work and Pensions written question – answered on 3rd November 2008.

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Photo of Sylvia Hermon Sylvia Hermon UUP, North Down

To ask the Secretary of State for Work and Pensions what the administrative costs have been of managing the pension credit system since its introduction; how much was paid in pension credit in each year; and what the percentage take-up of pension credit by (a) men and (b) women was in each year since its introduction.

Photo of Rosie Winterton Rosie Winterton Minister of State (Regional Affairs) (Yorkshire and the Humber), Minister of State (Department for Work and Pensions) (Pensions Reform) and Minister (Yorkshire and the Humber)

The following table shows the administrative costs for managing the pension credit system since its inception in October 2003. Please note that due to the launch of pension credit in October 2003, the figures for the financial year 2003-04 are low in comparison to future years; years 2004-06 administrative costs are at their highest due to these years being the peak years for achieving the PSA target; and years 2006-08 represent steady state. The lower costs for 2007-08 represent the impact of the Pension Transformation Programme (PTP) and the introduction of PTP wave 1.

Administrative costs of pension credit
£ million
2003 - 04 2004- 05 2005- 06 2006- 07 2007- 08
Operations cost 108 148 138
Central functions cost 50 81
Non-staff cost 14 14
Operations total 108 212 233 167 151
Local service 23 19
Total administrative cost 108 212 233 190 182
Notes:

1. All data taken from ABM except central directorate costs from Pensions Finance Data Warehouse.

2. 2003-04 costs are the operational costs for pension credit only i.e. they exclude central and non-staff costs which are not available.

3. 2004-05 and 2005-06 central functions and non-staff costs pro rated from pension credit share of operations costs.

4. Final 2007-08 outturn total = £404.29 million.

The following table shows the benefit expenditure for pension credit every year since its inception in October 2003.

£
Pension credit 2003-04 2004-05 2005-06 2006-07 2007-08
Guaranteed Credit 2,149,436,784.43 5,021,469,725.15 5,373,055,921.09 5,678,257,755.67 6,024,504,180.52
Savings Credits 321,405,374.33 952,231,720.09 1,052,473,111.63 1,148,677,229.05 1,221,796,985.76
Out of Hours Service -65.00 -3,569.62 -70.00 -100.00
LPS 16,049,910.87 85,339,674.90 147,610,977.68
Total 2,470,842,093.76 5,973,697,875.62 6,441,578,873.59 6,912,274,659.62 7,393,912,043.96
Source:

Accounting, Shared Services, Norcross.

The percentage of take-up for pension credit by male/female gender for every quarter since October 2003 are shown in the following table.

Pension credit case load, number of claimants and percentage by gender of claimant
Percentage of case load
Total case load claimants (Thousand) Female Male
November 2003 2,084.70 64.9 35.1
February 2004 2,282.29 64.4 35.6
May 2004 2,490.76 64.0 36.0
August 2004 2,592.59 63.8 36.2
November 2004 2,629.58 63.7 36.3
February 2005 2,654.67 63.6 36.4
May 2005 2,682.73 63.4 36.6
August 2005 2,696.66 63.3 36.7
November 2005 2,708.05 63.1 36.9
February 2006 2,709.22 63.0 37.0
May 2006 2,717.39 62.9 37.1
August 2006 2,728.15 62.8 37.2
November 2006 2,738.56 62.7 37.3
February 2007 2,730.94 62.5 37.5
May 2007 2,733.50 62.4 37.6
August 2007 2,735.72 62.3 37.7
November 2007 2,734.54 62.2 37.8
February 2008 2,723.14 62.1 37.9
Source:

DWP Information Directorate Work and Pensions Longitudinal Study.

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