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Pensions Bill [HL]

I think that many of us would like the annual cap of £4,200 on contributions to NEST to be removed. However, I again understand the industry’s worries about losing funds under management from the better-off. I accept that a person would have to be a reasonably high earner to hit that cap of £4,200 each and every year. The amendment would simply allow the making-up of missing years—I am rather keen on making up missing years whether in the basic state pension or in NEST. The person concerned may have enjoyed a small legacy, perhaps on the death of a parent and the sale of the parent’s home. They may have had a small lottery or premium bond win. He or she may have traded down their home to somewhere smaller while in their fifties and have thought that it made very good sense to add some of the modest equity available to their pension fund as a form of saving. They may have divorced and received from it a modest financial settlement of a few thousand pounds or so, some of which they would like to put in their pension to make up for the years that they missed. I make it clear that there is no suggestion of there being any parallel employer contribution; the amendment would simply allow an employee, if they wished, to add to their pension pot. The money would not come from any other savings, nor would it be a transfer. It would be, so to speak, new money. Although I doubt that it would occur very often, being able to add to their pension pot in this way would still offer women in particular, whose financial and, frankly, personal and private lives are highly unpredictable, some extra flexibility in the way in which they build their NEST pension. I beg to move.