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Means-Tested Savings

Volume 406: debated on Thursday 5 June 2003

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To ask the Secretary of State for Work and Pensions, what plans he has to reform the capital rules on means-tested savings. [112095]

When the Pension Credit is introduced in October this year, the rules excluding pensioners with £12,000 or more in savings from any help will be abolished. Savings of £6,000 or less (£10,000 or less for those in care homes) will be disregarded in full.The rate at which we assume income from capital in excess of the £6,000 (£10,000 where appropriate) will be set at £1 in £500, which is half the rate currently assumed for the minimum income guarantee. In addition any assumed income will count towards the savings credit. Overall this means that savings will be treated five times more generously than under minimum income guarantee.We have no plans to make any further changes to the capital rules.