Oral Answers to Questions

David Crausby Excerpts

Monday 5th November 2012 Commons Chamber

[Steve Webb]

I am grateful to my hon. Friend for that. The industry’s response to the code has been very encouraging. Some 49 individual firms and, perhaps more importantly, 14 representative organisations have publicly signed up to support the code, and the figures are growing. The supporters include the major employee benefit consultancies engaged in these exercises and their representative organisations.

[Mr David Crausby (Bolton North East) (Lab)]

Auto-enrolment of pensions is a wise and overdue step forward, especially for low-paid employees. However, with workers changing jobs an average of 11 times in their working lives, does it not make much more sense for them to park their pensions in low-cost aggregator schemes? If not that, what will the Minister do to ensure that fundholders will not have incurred high charges throughout their working lives as a result of numerous transfers?

[Steve Webb]

The issue that the hon. Gentleman rightly raises is one of the many loose ends left for us by the previous Government. When auto-enrolment was set up, they simply left us with a situation where people could accumulate a dozen small pots and leave them fragmented. We propose under auto-enrolment that where people leave behind a small pot it will, by default, transfer to their new employer, so that they will accumulate what I have called, in technical terms, a big fat pot.