Pensions Bill [HL]

Debate between Lord Stoneham of Droxford and Baroness Grey-Thompson

Wednesday 30th March 2011 Lords Chamber

[Baroness Grey-Thompson]

My Lords, I rise to speak to this amendment as someone who is certainly not an expert in pension provision; I admit to finding a lot of it rather confusing. The amendment tabled by the noble Baroness, Lady Greengross, is a very positive and useful way forward.

What concerns me is not the arguments that we heard earlier about the 2.6 million women having to wait longer than expected, the 330,000 who will have to wait 18 months or even the 33,000 who will have to wait two years to receive their pension, but the fact that, of the current pensioners who live in poverty, two-thirds are women. The Joseph Rowntree Foundation has made estimates about the poverty level, which it set at around £14,000 a year, and recognises that one in four women retiring today has less than £10,000 a year to live on. We know that women earn less pay on average, while taking time out to raise children means that they earn less over their lifetime. For me, though, the inequality in savings that women have access to is a stark reminder of where many women live today. The average savings in pension schemes of women between 51 and 59 are £37,000, compared to the £54,000 that men hold.

We have heard many case studies. I am very fortunate. I employ someone who is 56 and has a sister who is four years older. Maureen will have to wait 10 years beyond the age of her sister to receive her pension. This is someone who worked for a number of years, took time out to bring up a disabled child, went back into part-time work and, with nothing impelling her to contribute to a pension scheme, made decisions to try to save money but also had to recognise that there was a huge potential loss of salary in contributing to a personal pension scheme. I fear that we are going to alienate a large group of women and penalise them for making sound family choices to stay at home and bring up children and look after them.

It may be true that we need change and need to move on. It might be true that women have relied too heavily on their husbands’ careers and earnings in setting their pension limits, but I strongly believe that women deserve to have more time to adjust to this change in thinking.

[Lord Stoneham of Droxford]

We are very sympathetic to the noble Baroness’s amendment. I congratulate her on an important contribution to this debate on an issue that the Government must address. A number of reasons have been explained, in this debate and in the preceding debate, on why that is important. Men are not being disadvantaged by more than one year, but over half a million women are. The period of notice is inadequate. Women in this age group are some of the most disadvantaged in terms of their pension provision. We have to accept that there is a contradiction with the coalition agreement. We are expecting some assurances from the Government in this debate, but we also accept that this is largely a negotiating matter with the Treasury. We welcome the announcement in the Budget of the new basic pension.

The noble Baroness, Lady Hollis, complained at Second Reading that the Pensions Bill ignored the £140 new basic pension, and said that it was like Hamlet without the prince. Now we have Hamlet with the prince but without a script. We want to see some details of the government proposals before committing ourselves to new transitional arrangements. We know that in present value terms the amendment will cost £7 billion, but the Government need to address the problem and come back with a considered amendment during the passage of this Bill in the other House with regard to how women affected by these transitional arrangements will benefit from the new higher basic pension.