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Pensions Bill

moved Amendment No. 34: 34: Clause 7, page 4, line 43, at end insert— ““(8) A job holder may give notice within a prescribed period before the automatic enrolment or re-enrolment date. (9) If a job holder gives notice under subsection (8), no contributions may be taken from the job holder or the employer on behalf of the job holder, notwithstanding any prescribed conditions for their repayment.”” The noble Lord said: I was going to say that we have had a long and useful discussion, covering all the ramifications and proceedings for a jobholder opting out of a qualifying scheme. Unfortunately I cannot say that. However, I do not think that even if we had had a lengthy discussion we would have covered the one point that I wish to make with this amendment, which is to add an extra two subsections to Clause 7, the first to say that a jobholder may give notice under this clause within a prescribed period before the automatic enrolment or re-enrolment date and the second to say that, if a jobholder gives such notice, no contributions may be taken from the jobholder or the employer on behalf of the jobholder, notwithstanding any prescribed conditions for their repayment. The amendment seeks to ensure that a jobholder is not prevented from opting out before the automatic enrolment date, thus stopping the process before any contributions are taken either from his pay packet or the employer’s account. We are not talking about inconsiderable sums that are going into what I call an escrow account and what the Minister sometimes calls an escrow account. Even if the qualifying scheme takes only the minimum contribution of 3 per cent from the jobholder, at the top end we are potentially talking about more than £80 disappearing with little warning for several weeks from the jobholder’s pay packet. I hope that my maths is correct. The figure is 3 per cent of £2,795, which is one-12th of £33,540—in other words, the UEL. For someone earning at the bottom end, the figure that I calculate is £12.58. That is likely to represent a significant loss of income to a low earner. Not only would giving a jobholder the possibility of opting out before the automatic enrolment or re-enrolment date allow him to preserve the whole of his pay packet if he considered it necessary, but it would save an awful lot of time and money that would otherwise be wasted on the collection and repayment of all those contributions mentioned in the previous group of amendments. My amendment would do nothing to weaken the advantages of auto-enrolment. There will be just as much inertia about opting out before the first contribution has been taken as after that point; indeed, there is probably much more, as the jobholder will not just have experienced a sudden 3 per cent drop in his take-home pay. I beg to move.