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Pensions Bill

I am not sure whether the amendment should be in the Bill, which is why it is important that my noble friend is able to clarify exactly, as far as he can, what the strictures and structures are of the personal accounts. That this should be the policy intent, objective and outcome that we seek to deliver, I think is absolutely right. When we were dealing with stakeholders, it was clear that even modest changes in charges, such as a rise in the stakeholders’ initial charge from 1 per cent to 1.5 per cent, could wipe out returns on schemes that are, by definition, not aggressive; they are largely default—75 per cent are likely to go into default schemes—and therefore fairly low risk and modest in the investment returns that can be expected in most economic climates. Over and beyond management performance, what really matters is charge levels. In conference after conference, my noble friend Lord Turner made that point clear when he was pressed by the industry to raise the charges threshold. He said, ““No, you can get it down to this and, for reasons of investment return, you must””. As I said, whether the provision should be in the Bill, I rather doubt, but I hope that my noble friend will today give us the reassurances that we need to address the substantial point made by the noble Baroness, Lady Noakes.