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Pensions Bill

I understand where my noble friend is coming from; obviously we all wish to see this simplification, particularly regarding the very complicated issue of protected rights when people are not in contracted-out schemes, or, indeed, contracted-out schemes in the future. My noble friend is pursuing three or four objectives which sometimes clash with each other and are not reconcilable. I understand that this is an awkward bit of protected rights and there is therefore a different rule when it comes to the rest of the annuity; people can end up having two types of annuity. As we were saying earlier regarding the amendment of the noble Baroness, Lady Howe, women live longer, and we also wish to ensure that couples, particularly women, have protection and do not need recourse to income-related benefits, particularly pension credit, in widowhood. They are best protected against that, until the happy day when women have an annuity or pension in their own right of sufficient size, comfort and affordability, by having joint lives on their husbands’ pensions—in other words, survivors’ benefits. But we are stripping out even that benefit, which is available through protected rights. That push to simplify is at odds with the push to keep as many people as possible off income-related benefits in older age. I do not have an easy solution: this is a problem that one hopes will diminish over time as more women carry their own pension. However, if we want to keep widows in particular off income-related benefits, we may do more to help them by changing the annuity rules rather than the pension credit rules. At the very least, spouses should be required to sign their spouse’s annuity forms so that they know what they are signing up to when they choose a single life annuity. From now on, such spouses will be even more vulnerable to having to receive income-related benefits than in the past.