Oral Answers to Questions

Debate between Laura Trott and Nigel Mills

Monday 19th June 2023 Commons Chamber

[Laura Trott]

I am sure that the hon. Gentleman will welcome the figures that I just announced on the uptake of pension credit. We will not have the eligibility figures for a while—hopefully, they will be out later this year. I hope we will see a rise, but in the meantime we are doing all we can—as I know is true across the House—to get as many people as possible to apply for pension credit so that they qualify for those important cost of living payments.

[Nigel Mills (Amber Valley) (Con)]

15. What recent assessment he has made of the adequacy of funding for defined-benefit pension schemes.

[The Parliamentary Under-Secretary of State for Work and Pensions (Laura Trott)]

The Pension Protection Fund publishes data on the funding of defined-benefit pension schemes. Average funding of the schemes was 113.1% in 2022 versus 104.3% in 2010—a significant improvement.

[Nigel Mills]

Does the Minister accept that we have spent 20 years—probably quite rightly—working out how we get more money into pension schemes to pay for the promise, and that now we need to work out what we do with the money in there that is in excess of what we need? Does she accept that in those 20 years we have seen pension funding increase probably at the expense of current workers, who get a much lower pension? Is there anything we can do to use the surplus to support the pension incomes in retirement of those current workers who will get a far less generous pension?

[Laura Trott]

As I would expect from a member of the Work and Pensions Committee and the head of the all-party parliamentary group on pensions, my hon. Friend makes an interesting point. In my time as pensions Minister I have tried to reduce the gap between DB and defined contribution pensions. I would be interested to talk to him about any further suggestions.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Work and Pensions (Laura Trott)]

I do not think they are. Also, the triple lock is very proudly a Conservative policy.

[Nigel Mills (Amber Valley) (Con)]

With interest rates looking to hit around 6%, are the Government considering making the support for the mortgage interest scheme a little more generous, perhaps by raising the cap or the interest rate, so that it provides the safety net that people expect?

Saving for Later Life

Debate between Laura Trott and Nigel Mills

Tuesday 7th February 2023 Westminster Hall

[Nigel Mills]

Would the Minister consider setting a target for the number of self-employed people who are regularly saving into a pension scheme by a certain date? I think the rate is currently around 16%. If we could get that up to the 48% it was at 20 years ago, that would be a dramatic improvement and would show whether the efforts to encourage people to save are working. Does she accept that targets are the only way to really drive change?

[Laura Trott]

I think what we need to do is set out a plan. I accept that when we look at the various mechanisms that I have outlined today, we should outline the impact that we think they should have. I commit to go away and have a look at that.

My hon. Friend the Member for Torbay asked what the Department is doing to develop sectoral pension schemes and whether they can be made available for gig economy employers. Collective defined contribution schemes have the potential to transform the UK pensions landscape. He will know that we introduced legislation to allow them for single employers last year, and we are currently consulting on multi-employers. They are really exciting and could be a way forward in this space.

I am conscious of time; I will obviously write to hon. Members to cover anything I do not get to. The Work and Pensions Committee is right to raise concerns about ensuring pensions adequacy. The shift from the promise of retirement income through defined benefit to defined contribution places responsibility on the saver to ensure they have the outcome they want, but I do not think there is widespread understanding of that among the general public. Personal circumstances obviously dictate what individuals consider an adequate level for retirement savings. It is my role as the Pensions Minister to enable people to save adequately, as well as to ensure pension-maximising returns on their savings. The key to that is empowering savers to take control of their financial future. The introduction of simple annual statements, the midlife MOT and the pensions dashboard will make pensions more understandable to the saver and empower them to take control of their retirement outcomes.

My hon. Friend the Member for Amber Valley (Nigel Mills) was entirely right that the pensions dashboard will be crucial to that. We expect to see on the dashboard an understanding of what current savings will lead to as retirement income. What he said about comparing that to what others have was really interesting, and I will take that away.

Oral Answers to Questions

Debate between Laura Trott and Nigel Mills

Monday 23rd January 2023 Commons Chamber

[Laura Trott]

I pay tribute to the work that the hon. Lady is doing in her constituency to boost take-up of pension credit. I would love to work with her and all across the House on this important topic that we are all focused on.

[Nigel Mills (Amber Valley) (Con)]

The Minister will know that a lot of private pension schemes increase by inflation each year, but with inflation capped at 5%. Will she encourage the trustees of those schemes, where they have a healthy balance sheet, to increase their pensions by the full 10% this year to help out those pensioners who are struggling?

[Laura Trott]

My hon. Friend does a lot of important work in this area. What he says is sensible, and all pension funds need to be looking at what more they can do to support pensioners.