Budget: Saving for Retirement

Debate between Baroness Greengross and Baroness Neville-Rolfe

Thursday 16th March 2017 Lords Chamber

[The Commercial Secretary to the Treasury (Baroness Neville-Rolfe) (Con)]

My Lords, the Budget has supported people saving for retirement through setting a market-leading rate for the NS&I investment bond. More broadly, the Government continue to support people to save through automatic enrolment into workplace pensions. This will lead to 10 million people newly saving or saving more by 2018.

[Baroness Greengross (CB)]

I thank the noble Baroness for that response but could she explain to the House how the ordinary person—we are given to understand that the Prime Minister is committed to protecting such people—can possibly plan for the future given changes such as those just announced to dividends, together with the introduction of lifetime ISAs, primarily designed to assist younger people in house purchase but which could undermine saving? How, with an ageing population and an ultra-low savings ratio, can we make sure of the vital necessity of younger generations saving for the future? What is the Government’s plan to improve savings for much longer later life, which people on the whole do not even realise that they will experience?

[Baroness Neville-Rolfe]

I thank the noble Baroness for that and for all she does in this important area. I think we have a clear sense of direction and a plan to restructure our finances and to invest in the future. Of course, all taxes and reliefs are kept under review through the annual Budget process. Our priority has been to increase the personal allowance, which benefits everyone. The lifetime ISA, which comes into operation very shortly, complements automatic enrolment, which will help people to save so much more. All these changes will help people. I know that the changes to automatic enrolment are expected to generate an estimated £17 billion a year more in total workplace pensions saving by 2019-20. I know noble Lords here were involved in that. It will make a lot of difference. Obviously, we have longer-term problems but the sense of direction is important.