Commons Sense

House of Commons · Westminster Hall

Future of Pensions Policy — [Mr Stewart Hosie in the Chair]

08 December 2020 · 8 other contributors · 14,686 words

Opened by Rob Roberts Ind Delyn

Responding minister: Guy Opperman

Benefits & Welfare

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Rob Roberts raised concerns about future of pensions policy — [mr stewart hosie in the chair] in Westminster Hall. A government minister responded.

Key points

  • People are living longer but pension discussions have not significantly evolved.
  • Five million retirees are unsatisfied with their financial circumstances, highlighting the need for earlier preparation.
  • The Government spends 126 billion on pensioners, with the state pension accounting for 102 billion.

Key requests to Government

The Government should consider reforming pension credit to make it an automatic benefit based on income levels, and increasing the auto-enrolment contribution rate from 8% to at least 12%. Rob Roberts also suggests introducing a savings element alongside auto-enrolment, reducing the starting age for auto-enrolment to 18, and removing the lower earnings limit.

How the debate unfolded

MPs spoke in turn to share their views and ask questions. Here's what each person said.

Opened the debate

Rob Roberts Ind Delyn

People are living longer but pension discussions have not moved on significantly. A study found that 22 million working-age adults do not feel knowledgeable enough to make decisions about retirement savings, and only 38% of children aged seven to seventeen learn money management in school. Five million retirees are unsatisfied with their financial circumstances, highlighting the need for earlier preparation. Pensioner poverty affects over a quarter of pensioners, with Age UK reporting that 1.9 million pensioners live in poverty. Only 60% of eligible pensioners claim pension credit, leading to £3.5 billion not reaching older people annually.

Other contributors (8)
  • Damien Moore Con Sleaford and North Hykeham

    I agree with my hon. Friend that pension providers should make their fees and charges explicit on websites and promotional materials to inform people from the start of the process. Mr Moore discussed the importance of pension policies, highlighting that Southport has a high number of pensioners and retirees. He welcomed the Pension Schemes Bill for addressing challenges faced by pensioners, such as navigating multiple pensions pots. He emphasised the need for regular information from employers about pensions and the importance of the pensions dashboard in simplifying pension information. Mr Moore also mentioned green investments within pension schemes and the need to educate people about pension issues early in their careers.

  • Jonathan Edwards PC Carmarthen East and Dinefwr

    I commend the hon. Gentleman on his speech about financial advice but suggest that education systems should play a greater role in teaching children about finance, encouraging early savings for pensions. The Member thanked the hon. Lady for raising an important issue regarding pensioners, particularly women born in the 1950s who were affected by changes to the state pension age. He asked what strategy the speaker supports to address these problems: bridging pensions or early access to state pensions. The hon. Member questions whether the increase in state pension age is still justified given that life expectancy may be falling, suggesting a need to reassess pensions policy.

  • Kirsten Oswald SNP West Tyrone

    Concerned about the complexity of UK pensions policy and its impact on Scottish citizens, highlighting issues such as section 75 debt, automatic enrolment limitations, gender disparities in pension wealth, climate change risks to pension assets, frozen pensions for overseas residents, and discriminatory regulations under the Equality Act.

  • Craig Whittaker

    Intervened, agreeing with Rob Roberts' suggestion about starting pensions education earlier in life.

  • Rachael Maskell Lab Co-op York Central

    She highlights inequality and insecurity in older life due to past income inequities, such as the gender pay gap. She also points out that many countries have better pension provisions than the UK, with examples like the Netherlands paying 95% of average earnings compared to the UK's 29%. Maskell supports automation for better access to pensions and other benefits.

  • Sarah Owen Lab Luton North

    The Member highlighted the financial struggles faced by her pension-age constituents during the pandemic, mentioning that at least 400,000 pensioners have been pushed into poverty since 2010. She expressed concern about the Government's decision to scrap free TV licences for over-75s and asked what measures will be taken to help those struggling financially due to the pandemic. The Member also questioned the Minister on future guarantees to protect pensions during economic recessions.

  • Seema Malhotra Lab Co-op Feltham and Heston

    Welcomed the debate, praised contributions from other MPs regarding pension credit and WASPI women. Called for cross-party consensus on pensions policy to ensure financial security in retirement. Raised concerns over under-saving among 12 million people and proposed lowering auto-enrolment age threshold to 18. Discussed the risks of major employers' pension schemes failing, citing Arcadia's £350 million deficit as an example. Emphasised the importance of protecting individuals from scams during economic uncertainty and urged for improvements in guidance appointments. Highlighted issues regarding pension charges, climate change investment policies, ASW steelworkers underpayment, WASPI women injustices, and DWP mismanagement of pensions.

  • Wendy Chamberlain Lib Dem North East Fife

    Emphasised the long-term nature of pensions policy and its impact on future generations, highlighting challenges such as automation, ageing population, climate emergency, and global pandemics. Advocated for retaining the triple lock due to intergenerational fairness issues and urged the Government to engage with ongoing pension campaigns like Equitable Life scandal, WASPI women, plumbers' pensions, and state pensions of British pensioners overseas. Raised concerns over underpaid married women's state pensions and called for clarity on pension credit scale.

Government Response

Guy Opperman

The Government spend £126 billion on pensioners, with the state pension accounting for £102 billion. The state pension has increased by £1,900 in real terms since 2010 due to measures like the triple lock. Material deprivation among pensioners has fallen from 10% to 6%. Take-up of pension credit remains low despite efforts and advertising campaigns; the Government have reached out to BBC for further assistance. Automatic entitlement is not feasible at present but future data could allow it. Improvements in automatic enrolment have increased participation rates significantly since its introduction, with £18 billion saved into workplace pensions annually. The lower earnings threshold will be implemented from age 18. Further changes may include a 1% saving add-on to the automatic enrolment scheme. The mid-life MOT is being improved for financial capability and inclusion.

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