Pensions: Sale of Annuities

Lord Hain Excerpts

Wednesday 19th October 2016 Lords Chamber

[Lord Young of Cookham]

I am grateful to the noble Lord. On the timing of the announcement, sometimes the market-sensitive nature of an announcement means it has to take place at a specific time, quite often when the Stock Exchange is not open. So far as those who are disappointed are concerned, the information available to the Government is that only 5% of those with annuities would be likely to have taken up this offer had it gone ahead, so roughly 95% will not be affected by the announcement. It is independent of any level of interest rates; it is not a function of quantitative easing or anything like that. I see that Steve Webb, to whom the noble Lord referred, has said that the decision is “disappointing” but “understandable”, implying that he goes along with it.

The final point about information is a good one and I will see what we can do to let people know. I suspect that many will have read the newspapers and are aware that this option will no longer be available.

[Lord Hain (Lab)]

Is not the problem that the Government have failed all along to provide a properly regulated, publicly controlled vehicle to satisfy the needs of those with very small annuities—often, by the way, ones that do not provide protection either for spouses or against inflation—who want to exchange them for a cash sum that they can repay debts with or provide for their partners? Now we have the worst of both worlds, being stuck in this policy impasse.

[Lord Young of Cookham]

I think the noble Lord is suggesting that, rather than the private sector providing an option for these annuitants, the Government should have provided it. That was never the proposal and he will know that, along with the other pension freedoms, they are operated by the private sector. Those who opt out of their pension to use the other options do so without resorting to a government scheme.