Oral Answers to Questions

Gregg McClymont Excerpts

Monday 1st September 2014 Commons Chamber

[Steve Webb]

We have made a number of changes to make sure that auto-enrolment works as smoothly as possible for the whole diversity of employment scenarios, such as the one to which my hon. Friend refers. The point about automatic enrolment is that where someone who is paid weekly exceeds the threshold once, they should be automatically enrolled. If in a subsequent week they earn below the threshold, nothing happens—no payment is due and no payment is made. If they go above the threshold again, payment is made, but there is no re-enrolment, disenrolment or leaving of the scheme. The complexity is often in perception, rather than in reality. If she is aware of individual employers who have particular problems, I would be pleased, as always, to receive details.

[Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)]

May I press the Minister further on the question asked by my hon. Friend the Member for Brent North (Barry Gardiner)? The Government have changed the rules on pension flexibility at retirement, or are in the course of changing them, yet there are members of pension schemes who will face huge exit penalties if they wish to take advantage of those flexibilities. Does he think pension savers in that situation will be comforted by his saying today, “Well, they entered into a contract and they have to put up with it”? The Government are changing the rules, so surely those savers deserve to be able to take advantage of the flexibilities just as much as anyone else.

[Steve Webb]

I do not think that the hon. Gentleman in his heart of hearts really wants these flexibilities. We announced in the Budget the flexibility for people to access their money at 55, in full and in cash if they want to do so. Clearly a minority of schemes—it is important not to exaggerate the scale of this—have contractual terms that relate to the basis on which money can be withdrawn. We are not overwriting the rules of existing schemes, but we are talking to the industry to ensure that as many people as possible can access their cash.