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Pensions Bill

In answer to the first point, I do not believe that the amendment will do what the noble Lord describes. Perhaps I may expand on the issue of the tax risk to the scheme. I noted that no noble Lord who spoke in favour of the proposition—with the exception of my noble friend Lady Hollis, who talked about withdrawal of the scheme’s tax benefits—indicated in any way what tax regime he or she thought should apply to it. That was not part of the proposition advanced by the noble Lord, Lord Hunt, and adhered to by others who spoke in favour of the amendment. It can make a fundamental difference to the operation of the proposal. I reiterate that, under this proposal, if someone has income from other sources, the minimum retirement income could be set at zero. If it is set at zero, so that the provider does not have to preserve amounts in the scheme for subsequent periods, there could effectively be no limit on the withdrawal. You could take a lump sum from the scheme in one go. It would be tax-advantaged savings with some real risks as to how the tax on it might be withdrawn. The noble Baroness, Lady Noakes, is shaking her head, but that is how this proposition would operate. A member would be able to withdraw large lump sums of tax-disadvantaged pension savings. Alternatively, as I said, a member might choose not to draw down any pension income at all from the RIF in order to pass the funds on to heirs. I say to the noble Lord, Lord Fowler, that we have no objection to—we would support—people providing for subsequent generations, but enhancing that provision for heirs by means of the benefits of a very significant tax-advantage regime is not what that regime is for.