The Minister of State, Department for Work and Pensions (Steve Webb)
I am pleased to announce that the Pensions Bill and associated documents will be published today.
The Bill was introduced into Parliament yesterday and provides for important reform to both state and private pensions, and bereavement benefits. This Bill will:
introduce the single-tier pension, a simpler, fairer system that encourages retirement saving, to be implemented from April 2016;
bring forward the increase in the state pension age to 67 and establish a framework for considering future changes in light of increasing life expectancy to maintain the long-term sustainability of the system;
provide for a system of automatic transfers of small pension pots, which will reduce the number of dormant pots and make it easier for people to keep track of their pensions savings and secure a better income in retirement;
introduce a new statutory objective for the Pensions Regulator to take account of the sustainable growth of employers, and contains a number of smaller amendments in relation to private pensions legislation, including some measures relating to automatic enrolment into workplace pension schemes; and
reform the existing suite of bereavement benefits to simplify the system in line with changes to the state pension and wider welfare reform measures, and ensure that it is fit for the 21st century.
It is vital that the pension savings of individuals who are automatically enrolled are protected. Following a thorough review, I have concluded that the consultancy charging mechanism is not appropriate in schemes used to comply with the employer duties under the Pensions Act 2008. I am therefore also announcing the Government’s intention to ban consultancy charges in automatic enrolment schemes. This will apply to both occupational and personal pension schemes and I intend to lay regulations before Parliament as soon as possible. Furthermore, in light of the forthcoming Office of Fair Trading report, the Government plan to publish a consultation this autumn. This will set out proposals including for introducing a charge cap.
Later today, the Government will also publish a response to the Work and Pensions Committee’s report of their pre-legislative scrutiny on part 1 of the draft Bill. I would like to express my thanks to the Committee for agreeing to undertake pre-legislative scrutiny and for their helpful recommendations. The report raised a number of important issues and has resulted in changes to the Pensions Bill since it was published in draft, including to specify that the single-tier pension will now be implemented from 6 April 2016.
I will place a copy of the delegated powers memorandum in the Libraries of both Houses along with a high-level single-tier communications strategy document and a list of all older papers relevant to the Bill.
Copies of the Government’s response to the Work and Pensions Committee, the impact assessment and the delegated powers memorandum will be available in the Vote Office and Printed Paper Office and on the GOV.UK website later today.