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Pensions Bill

I thank my noble friend for this amendment. The reforms that we have discussed have been structured to set a median earner with a solid state entitlement on course to achieve an income in retirement of around 45 per cent of their working life earnings, in line with the recommendation of the Pensions Commission. The qualifying earnings band establishes the link between working life earnings and pension saving. As the noble Baroness, Lady Noakes, said, this is part of the consensus that was reached. Having made this important link, we need to maintain it. We will do this by reviewing the limits of the band every year to see whether they have maintained their value. Depending on the outcome of that review, we expect to uprate the limits in line with changes to average earnings. Ensuring that the limits of the qualifying earnings band keep pace with changes to average earnings will ensure that the contributions of jobholders also keep pace. This is important if we are to maintain the balance between working life income and income in retirement. Uprating the lower limit of the qualifying earnings band in line with changes to average earnings will also avoid enrolling increasing numbers of workers on very low earnings, for whom state provision already offers high income-replacement rates. It is crucial that we retain the flexibility necessary to ensure that the earnings band is uprated appropriately. As my noble friend said, pensions are a long-term issue. However, the clause as drafted already provides that flexibility. I do not believe that these amendments would provide any additional flexibility when it comes to reviewing and uprating the limits of the qualifying earnings band. Accordingly, I ask my noble friend to withdraw her amendment.