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Pensions Bill

I hear what the hon. Gentleman says. The issues of savings incentives, disregards and trivial commutation can all be considered. We discussed some of them in Committee, and the Government have decided to set up a Government-led work programme to consider the whole issue, evaluate the evidence and consider the interaction between pension savings and income-related benefits in a reformed system. The programme will examine the incentive effects, the balance that we need to strike between alleviating poverty and incentivising savings, and the cost constraints that we face. It is important that people accept the responsibility to provide for themselves and also that the pension credit safety net is there if needed. The effect of new clause 2, which I suspect the hon. Member for Eastbourne will not press, would be to delay the introduction of personal accounts if the number who may not benefit is greater than 10 per cent. That would deny many individuals the real benefits of starting to save early. The reforms represent the last piece of our pensions puzzle and it would be folly to delay introduction on that basis. The effect of amendment No. 38 would be to require the annual publication of our projections of the impact of means testing for members of the personal account scheme and those whose pension savings might be subject to marginal deduction rates of 40 per cent. or higher. We have already published our projections of entitlement to pension credit until 2050, and are currently finalising a fact sheet of projections of entitlement to all income-related benefits for the pensioner population. We expect to publish that shortly. There is no need, therefore, for such an amendment to the Bill. Publishing projections of benefit entitlement is routine and represents good practice and we intend to continue with it. Indeed, my right hon. Friend the Secretary of State, when he was in my job, advised Parliament in Committee on last year's Pension Bill that we already regularly publish that information, usually annually. I am happy to reiterate that statement in order to reassure the House. I believe that our package of reforms represents the right balance. Let me deal with generic advice, which has been raised both by the Liberal Democrats and by the hon. Member for Hemel Hempstead (Mike Penning). Clause 9 recognises that individuals will need access to relevant and accurate information when they are auto-enrolled, but amendment No. 37 would mean that all those who were auto-enrolled would be entitled to publicly funded independent one-to-one generic advice. I do not agree that one-to-one advice will be needed by every job holder. That is because the decision to remain enrolled will be straightforward for most people. The employer contribution means that most people will benefit and enjoy a more prosperous retirement. Good information is important and the DWP and other organisations, such as Citizens Advice, the Pensions Advisory Service and the Financial Services Authority, already provide some elements of advice. We will ensure that every automatically enrolled individual has access to the range of information that they need to understand the process of automatic enrolment, the pensions scheme that they will be enrolled into, their expectations for a state pension and the implications for later life. As Members will be aware, there is at present no legal requirement for individuals to receive any one-to-one advice before they are automatically enrolled on an occupation pension scheme. Giving people a new legal entitlement to one-to-one advice could give them a misleading impression that automatic enrolment is either a risky and complex process for which they must have that advice, or could lead to their making erroneous decisions. We therefore take the view that the best approach is to ensure that people know the basic information about automatic enrolment and what it means for them. If it is a private sector pension and the person is enrolling into personal accounts, the pension providers will have advice about the implications of their product that they will give to those who are automatically enrolled into the scheme. In many cases, such advice is given now. We will be dealing with many people on low incomes, and although I entirely accept the views of the hon. Member for Bournemouth, West (Sir John Butterfill)—who knows much more detail about our parliamentary pension scheme than I do—advice and information is already being given out by some of the schemes. I do not want to create a system whereby we have to load on a lot of advice for personal accounts in particular, because the cost will end up being paid by people who are enrolled into personal accounts. If we load up the cost, it will end up being a charge on the members of the scheme. We need to provide generic advice, which is already available. Otto Thoresen has already published a report in which he referred to the provision of generic advice for those who were entering personal accounts. He rightly made the point that that is not just a problem for personal accounts but that it has a broader base. We are looking at the Thoresen review's details on generic advice so that we can identify ways in which we can take forward the provision of the sort of advice that people on particularly low incomes will need.