Pensions

Lord Davies of Oldham Excerpts

Thursday 21st October 2010 Lords Chamber

[Lord Sassoon]

My Lords, my understanding is that, thanks to work being done by the Association of British Insurers and others and the introduction of a new electronic transfer system, the actual time taken to make the transfer has come down from 35 days to 11 days. However, if there are other ways of making the transfer process easier, we will of course look at them.

[Lord Davies of Oldham]

My Lords, is not the real problem for the foreseeable future that, with interest rates low, the returns on annuities will be well below people’s expectations? Could not the Government think more radically about this in the longer term? Could we not think of following the pattern adopted by some other European Governments on annuities, whereby people would be able to purchase government bonds at a slightly better rate of interest than obtains at present and at the same time contribute to the Government in the shorter term sums which would help the Exchequer?

[Lord Sassoon]

My Lords, low interest rates are vital to the growth of the economy. In that context, it is important that people are able to choose between a wide variety of savings products. As well as making more flexible people’s choices about their retirement savings, the Government offer not only the opportunity to invest in gilt-edged securities but a range of products through NS&I.