Pensions: Tax Relief

Baroness Bakewell of Hardington Mandeville Excerpts

Tuesday 6th December 2016 Lords Chamber

[Lord Young of Cookham]

I am grateful to my noble friend for endorsing the decision I announced at the beginning of this exchange that, in view of the absence of a consensus for an alternative, we wanted to stay with the regime that we have at the moment, which as my noble friend has said, has many advantages.

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords—

[Lord Brookman (Lab)]

My Lords—

[The Lord Privy Seal (Baroness Evans of Bowes Park) (Con)]

My Lords, it is the turn of the Liberal Democrat Benches.

[Baroness Bakewell of Hardington Mandeville]

My Lords, the current system benefits the wealthiest in our society. However, if tax relief were changed to match funding with thresholds aimed at lower savers and, for example, the first £500 was matched by the Government pound for pound, thereafter gradually tapering down, this would demonstrate the benefits of savings as it supports those on lower incomes getting the most. Does the Minister agree that reform to match funding, rather than tax relief, would give a greater incentive to save?

[Lord Young of Cookham]

I give the noble Baroness the same response that I gave to her noble friend at the beginning of this exchange. We looked at alternatives to the current regime a year ago and because there was no consensus we decided to stay where we are. In view of the complexities of rolling out auto-enrolment, we decided that this was not the right time for fundamental reform.