Friday, 13th March 1998.

cases. This is simply not acceptable, and PIA' s action is to be commended.

As noted above, a number of large firms have resolved over three-quarters of their cases. Some of these firms are now getting close to the point where they will have completed their priority cases. This is welcome news. However it highlights the importance of looking forward beyond the first phase of the review of pensions mis-selling. The first step has rightly been to address the more pressing categories of cases—for example, the cases of those who are most likely to have lost out and those either in or close to retirement. But they are not the only victims of pensions mis-selling and it is now important to look ahead at how to address the less pressing cases, which have in the past been referred to as "non-priority" cases.

The regulators—the Financial Services Authority (FSA) and the PIA—have this week issued a consultation document setting out proposals for taking forward the review of personal pensions mis-selling into its second phase. Copies have been placed in the Library. The Government welcome this step forward, which reflects the outcome of research on the extent of the problem.

The document sets out the regulators' proposed approach for firms to tackle the second phase of the review, building on experience of the first phase. It is important to note that this policy is not yet finalised. The way forward must be practicable. It must work. That is why the regulators have chosen to consult.

This is particularly important given that initial research commissioned by the FSA suggests that it will be a large task—potentially involving as many as 1.8 million cases. Whatever the final figures turn out to be, it is clear that the scale is such that it is in everyone's interests that the process adopted is the right one. To that end the Government urge everyone who is involved or has an interest to participate in the consultation— including investors, occupational pension schemes and of course the firms themselves. In doing that, the Government hope that everyone will make constructive contributions. That is the only way to see that the final policy that the regulators adopt is the best way forward, in the interests of investors and ultimately in the interests of the industry.

Following is the table referred to:

A: cases identified as requiring review.

B: of A, cases where investor was informed that information gained during assessment excluded cases from review.

C: number of assessments completed.

D: cases where the investor has been informed that no redress is due.

E. cases where redress has been offered.

F: cases where redress has been accepted.

G: cases where redress has been accepted as a percentage of cases identified for review ((F/A)x 100).

H: cases completed, including exclusions, as a percentage of cases identified for review (((B+D+F)/A)x100).

Notes:

1. Figures are for the financial year 1995–96 and come from the Department's Households Below Average Income (HBAI) series, based on the Family Resources Survey (FRS). The FRS data was used to achieve a large enough sample size to provide more robust information. All results are subject to sampling error. The benefit rates also relate to the period 1995–96.

2. Sixteen to 18 year-olds who are in full-time education are not included in this count. Some students are not covered by the Family Resources Survey.

3. The income measure used was net unequivalised individual income, with child benefit and one parent benefit discounted when calculating those above the family credit threshold. Income is that reported as accruing to the man; income attributed to any partner is ignored.

4. Threshold has been defined as the level of income at which entitlement to the benefit runs out.

5. The income support threshold was calculated to be £115.15 per week, comprising the rate for a couple where both are over the age of 18 (£73), the family premium (£10.25) and £15.95 for each dependent child.

6. The family credit threshold was calculated to be £170 per week, comprising the adult credit of £45.10 (assuming the adult is working less than 30 hours per week), £11.40 for each dependent child and then adjusted for the 70 per cent. taper.

The Case for Welfare Refortn (Department of Social Security, 15 January), what heads of social security expenditure account for the fact that the share of social security benefits going to the poorest 20 per cent. has fallen since 1979. [HL654]

Notes:

1. In this table, a "pensioner" is someone living in a benefit unit where all adults in the benefit unit are over state pension age; "Working age in a workless household" recipients are people living in a working age benefit unit where all members of the household in which they live are out of work; and "Working age in a working household" are recipients living in a working age benefit unit where at least one member of the household is in work.

2. The information is calculated from survey data where individuals report which benefits they receive.

3. Income is the standard Households Below Average Income measure—household net equivalised income after housing costs.

4. The survey covers the private household population. People living in institutions, hostels, bed and breakfast accommodation and the homeless are not covered here.

5. The income distribution refers to the whole population income distribution and not the income distribution for each type or person.

6. Estimates are based on the 1979 and 1994–95 and 1995–96 Family Expenditure Surveys and are subject to sampling error.

7. 1994–95 refers to the 1994–95 and 1995–96 financial years combined.

8. Income has been adjusted for household size and composition (equivalisation) but no adjustment has been made for any additional "needs" of disabled people.

Notes:

1. Components of each category are:

1979

Means tested benefits—supplementary benefit, rent and rate rebates, family income supplement.

Contributory benefits—retirement pension, invalidity benefit, unemployment benefit, widow's benefit, sickness benefit, maternity allowance.

Non-contributory, non-means tested—war disability pension, attendance allowance, child benefit, housewives non-contributory invalidity pension, non-contributory invalidity pension (predecessors of SDA), industrial injuries disablement pension, invalid care allowance, mobility allowance, Christmas bonus, any others reported.

1994–95

Means tested benefits—income support, housing benefit, council tax benefit, family credit.

Contributory benefits—retirement pension, invalidity benefit (1994–95), unemployment benefit, widows benefit, sickness benefit (1994–95), incapacity benefit (1995–96), statutory sick pay, statutory maternity pay, maternity allowance.

Non-contributory, non-means tested—war disability pension, attendance allowance, child benefit, severe disablement allowance, industrial injuries disablement pension, invalid care allowance, disability living allowance, Christmas bonus, any others reported.

2. Income has been adjusted for household size and composition (equivalisation) but no adjustment has been made for any additional "needs" of disabled people.