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Pensions Bill

The right reverend Prelate has hit two nails very firmly on the head. ““Generic financial advice”” is a little like the motherhood and apple pie of the noble Lord, Lord Oakeshott, because it means different things to different people. For some of your Lordships who have just spoken, it is clear that it means pensions advice, whereas to me it means advice on savings. After all, it is total savings that will affect one’s benefits and pension credit and so on when one comes to claim them. There is in this generic advice a great danger of what in an earlier Pensions Bill—I think that it was that of 2004—the noble Baroness, Lady Hollis, referred to as ““moral hazard””. Of course, I take note of the Thoresen review and report, but who will be responsible for this advice in individual cases? Will it be the global organisation that is set up, or will it be the individuals within that organisation? We live, alas, in an increasingly litigious society. If people feel that they have had the wrong advice, they may go to a pro bono lawyer and ask whether they can get recompense as a result. Nobody wants that. It is not good for auto-enrolment; it is not good for personal pensions; it is not good for savings generally. I worry about it. The other nail that the right reverend Prelate hit firmly on the head was the prescriptive nature of a part of the amendment. It states that the advice must be both face to face and, more important, last at least one hour. We all know that the general level of financial literacy in this country is abysmal. For many people, one hour might be scarcely enough; for others, it may be a fraction—but probably only a fraction—too long. I do not know how many noble Lords have been to the retirement conference hosted by one of the big insurance firms that takes place—I think, annually—in Westminster. That takes three to three and a half hours to explain retirement income and allied matters such as capital gains tax and capital transfer tax to people who are at least financially educated enough to go along and try to understand this advice and, one hopes, in many cases to act on it. However, I am afraid that I do not regard them as representative of the general mass of the population. I do not mean to be patronising in the least. I am sure that many people up and down the country would understand the advice and act on it, even if it is being given for, say, half an hour or 45 minutes. However, there are many of us—and at one stage in my life, that most certainly included me—who would have taken a lot longer to understand it. Having said all that, I believe that there is clearly a need for financial advice of a general nature. The real problem is how you can safely provide it without brickbats falling either on the Government of the day or on the organisation or individual members of the organisation that is set up to give it. I am glad that we have had this short debate, which I hope will colour our thoughts on later amendments. For now, however, that is my opinion on generic advice.