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Written question asked by Lord Grayling (Conservative) on Friday, 20 July 2007, in the House of Commons. It was due for an answer on Tuesday, 24 July 2007. It was answered by Mike O'Brien (Labour) on Monday, 29 October 2007 on behalf of the Department for Work and Pensions.

Pensions: Financial Assistance Scheme

Question
To ask the Secretary of State for Work and Pensions what estimate he has made (a) on an actuarial basis of (i) the average life expectancy of the pensioners who are eligible for payments under the Financial Assistance Scheme (FAS) and (ii) the number of eligible pensioners who will not receive any compensation due to short life expectancy, (b) of the average amount of funding required to compensate each recipient of payments from the scheme and (c) of the amount of time that it will take to provide full compensation to all pensioners eligible for the FAS.
Answer

The Financial Assistance Scheme (FAS) model uses a rate of 85 per cent. of the UK population mortality rates as projected in the most recent 2006-based national population projections produced by the Office for National Statistics. This assumes that on average eligible male and female members of a FAS qualifying scheme attaining age 65 in 2010 will live for a further 22.6 years and 24.9 years respectively, rising by 2025 to a further 24.2 and 26.4 years respectively.Based on these mortality assumptions 7,050 people who are currently eligible for FAS will die before age 65 and therefore not get assistance. The FAS does however provide assistance to surviving spouses or civil partners of deceased qualifying members of qualifying schemes.As at 30 September 2007 the numbers of people receiving FAS payments (excluding arrears) within the ranges shown are as follows:

Payment range gross figures (per annum) Number of members receiving annual payments Number of members receiving initial payments¹ Total number
£521 - £1,000 78 575 653
£1,001 - £3,000 135 951 1,086
£3,001 - £5,000 51 387 438
£5,001 - £7,000 17 211 228
£7,001 - £9,000 7 96 103
£9,001 - £11,000 2 27 29
£11,001 - £12,000 1 22 23
291 2,269 2,560
¹ Whose pension schemes have not yet completed wind-up.

We estimate that between 6,500 and 7,500 members have passed the age of 65 since their scheme entered wind up and are now eligible for FAS assistance.The youngest scheme members will not be eligible for financial assistance for a number of decades. A member who was 20 years of age when their scheme started to wind-up in 2005 would not qualify for payment of assistance until 2050. Therefore it could take at least 40 years before full assistance starts being paid to all members eligible for FAS.

Secondary information

Type
Written question
Reference
152562; 465 c772W
Session
2006-07
Subjects
Financial assistance scheme Pensions
Link
View this Written question on www.publications.parliament.uk