Pensions (Extension of Automatic Enrolment) (No. 2) Bill

Lord Palmer of Childs Hill Excerpts

2nd reading
Friday 14th July 2023 Lords Chamber

[Lord Palmer of Childs Hill (LD)]

My Lords, I thank the knowledgeable noble Baroness, Lady Altmann, for bringing this Private Member’s Bill to the House and the usual cast of knowledgeable speakers we have in every pensions debate—the noble Baroness, Lady Drake, the noble Lord, Lord Davies, and, in due course, the noble Baroness, Lady Sherlock. It is very much déjà vu; we come back to this again and again. I also thank the Minister for mentioning this morning my mild contribution to the Child Support (Enforcement) Bill. We are always grateful for acknowledgement of our modest support and information, and the Minister was particularly helpful on that issue. I was not in my place because I did not know that we were going to make speeches.

I support this Private Member’s Bill to amend the Pensions Act 2008 to give the Secretary of State powers, as has been said, to extend pensions automatic enrolment to workers from age 18 rather than, as now, only 22 and to increase contributions so that pensions savings are based on all earnings up to just over £50,000 per annum rather than only over the lower earnings limit, referred to by the noble Baroness, Lady Altmann, of £6,240 per year. It is great that this Bill is being progressed. I would like to pin down the Minister on a timetable—when will the changes take place? Even if they cannot be made immediately, we need a firm timetable so that people can plan. The whole idea of pensions is to plan for the future, and having no fixed timetable is not useful to those looking to do so.

When I was a local councillor, I had advice cases galore. One of the nicest things about coming to this House is that those advice cases almost dry up. However, earlier this year by accident I got an advice case, relevant to this debate, from a woman who was a nurse for many years. She retired, took a pension and then came back to work. On her payslip every month, there was a pension deduction; so, when she retired a second time, she looked for the secondary pension that she had contributed to and found, to her amazement and mine—I checked this with our Minister at the time—that the money had been deducted but had not gone to a pension at all. She should have been aware of it, but she was not, as on the payslip there was a deduction for a pension. After my and others’ intervention, the end product was a return of contributions rather than a pension. The relevance of this very rare advice case is that, when contributions are deducted, everyone will be auto-enrolled and therefore that deducted money would be a pension scheme.

Automatic enrolment is a genuine success story. It has not got to the end yet, as pointed out by noble Lords, but making these changes to auto-enrolment, which were recommended in the 2017 independent AE review, and extending its scope will mean that more people have an adequate income in retirement. As has been mentioned, broadening auto-enrolment will be of particular benefit to under-pensioned groups: women, ethnic minorities, younger people, multiple job holders and gig economy workers. The Government committed to bring forward these changes in the mid-2020s, so it is welcome to see that they are serious about hitting this target by backing this Bill and finding parliamentary time to allow these reforms to take place.

However, I echo the comments of the noble Lord, Lord Davies. I still cannot get my mind around why we have a succession of Private Members’ Bills—this is not the only one—to bring forward legislation, rather than the Government bringing forward a more comprehensive Bill on pensions. But this is the way it is being done and I heartily support it.