Oral Answers to Questions

Barry Gardiner Excerpts

Monday 1st September 2014 Commons Chamber

[Steve Webb]

I am grateful to my hon. Friend for his supportive comments. Focusing on automatic enrolment, I am pleased to tell him that we aim to protect as many members of automatic enrolment qualifying schemes as possible, regardless of when they started contributing. From April 2015, the cap will therefore apply both to members of schemes newly set up for automatic enrolment and existing qualifying schemes for auto-enrolment.

[Barry Gardiner (Brent North) (Lab)]

How concerned is the Minister about savers who want to take advantage of new pension flexibilities being subject to huge penalties in exiting their scheme? What action is he taking to ensure that that cannot happen?

[Steve Webb]

The hon. Gentleman raises an important point. A review of legacy pension schemes is under way, under the auspices of the Association of British Insurers, and the issue of excessive exit fees is part of it. In most cases, the terms of schemes will allow people to access their budget flexibilities, but there may be some where the contract and scheme rules impose a charge, and that is a contract that people have entered into.