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Pensions Bill

In welcoming the opportunity that this amendment has given for a wider ranging debate than just the element of PADA, I once again declare my interest as a partner in the national commercial law firm of Beachcroft. I also have the honour this year to be president of the Chartered Insurance Institute. I congratulate the noble Baronesses, Lady Hollis of Heigham and Lady Dean of Thornton-le-Fylde, on giving us an opportunity to debate this issue. Pensions have always been a poor fit for the risk and realities that women face. I very much welcome their support for what was an initiative by David Willetts in launching four years ago a consultation on the paper Towards a Lifetime of Saving written by the Conservative Research and Development Policy Unit. LiSA—the lifetime savings and pension account—is a new approach which is extremely simple, clear and flexible and supports both life cycle and retirement saving. It is very much a wrapper not a product in itself and, after the consultation last August, John Redwood’s Economic Competitiveness Policy Group report endorsed the idea of a flexible lifetime savings account. I agree with my noble friend Lord Fowler that this in an interesting and valuable notion. His reference and the reference by the noble Baroness to the Section 401 scheme in the United States gives us an example of how one can turn the cycle of what has now become a system in which it is very easy to borrow but very difficult to save. That is one of the problems the Government are now facing in bringing forward the Bill. I agree, however, with the noble Lord, Lord Kirkwood of Kirkhope, that although the concept is good, we are a little concerned that it might make the objective of PADA and Mr Tim Jones more complicated. Although it is a very good idea, attaching what one might describe as bells and whistles to the concept might make it a little more difficult to introduce and delay its implementation. However, it is important to know where the Government stand on the idea. There is no doubt that the noble Baroness is right—something needs to be done to meet the particular circumstances faced by women as well as a number of other groups in society. It is easy to regard investment in a home as the opportunity to build up resources for retirement. Indeed, we have seen a shift towards greater emphasis on property investment in the main home rather than in a more flexible savings account. We shall be dealing with the right to access tax-free lump sums when we come to the amendments on annuities. I do not really want to go down that road although John Redwood said in his Economic Competitiveness Policy Group report that it was essential to abolish the age requirement of 75. The noble Baroness has given us an excellent opportunity to reflect on how we can ensure that the particular circumstances of certain groups, especially women, are met much more adequately and positively by new concepts and by moving forward in a way that will positively encourage the sort of saving that we would all like to see. I hope that the Minister will come forward with some constructive proposals in response to this most interesting debate.