Pension Funds

Manuela Perteghella Excerpts

Wednesday 23rd April 2025 Commons Chamber

[Manuela Perteghella (Stratford-on-Avon) (LD)]

Pension funds hold not just financial value but moral weight. How we treat our pensioners, and how we invest in the future of the hard-working people of this country, says everything about the kind of society we are. I want to bring to the House’s attention one of the most concerning injustices faced by thousands of former HSBC employees, particularly women: the use of an outdated, punitive policy known as pension clawback.

I support the Midland Clawback Campaign, which seeks justice for the 51,000 affected members of the Midland bank pension scheme, now administered by HSBC, who were misled about the nature of their retirement income and are being short-changed as a result. Unlike most other institutions, which phased out clawback in the 1980s, HSBC continues to enforce it in its most punitive form. Clawback was originally introduced in 1948 to offset national insurance costs when the state pension was created. Midland bank introduced clawback to its pension scheme in 1975 as a cost-saving measure.

Former employees were told that they would receive a defined-benefit pension at two thirds of their final salary, in addition to their state pension. Instead, when they reached state pension age, HSBC began deducting a portion of their occupational pension, calling it a “state deduction”.

[Lee Pitcher (Doncaster East and the Isle of Axholme) (Lab)]

I have a constituent who has worked for 44 years at Midland bank and HSBC. They were promised a pension of two thirds of their final salary, but they now face a 16% cut—that is over £1,700 per annum—because of the so-called state deduction. They were never told that the scheme was integrated, and even private pension reviews failed to explain it. Does the hon. Member agree that that lack of transparency is unacceptable and that workers like my constituent deserve answers?

[Manuela Perteghella]

I fully agree. The term itself is misleading. The money is not being taken by the state; it actually goes back to HSBC. Had it been labelled properly, as an integrated pension deduction, many people would have asked questions much earlier.

[Clive Jones (Wokingham) (LD)]

I thank my hon. Friend for securing the debate. Sue, a constituent of mine, is trying to obtain her full HSBC pension, but because of a clawback deduction by her former employer that has no alignment with the salary she earned, she is losing out on £244 each month. That is unfair and has plunged many pensioners—primarily women—into poverty. Does my hon. Friend agree that the Minister must seriously consider what support can be provided for people like Sue, who have been left with significant financial difficulties?

[Manuela Perteghella]

Absolutely. I will ask the Minister to take action later in my remarks.

[Luke Myer (Middlesbrough South and East Cleveland) (Lab)]

My constituents Phil and Ann have contacted me about the so-called clawback policy, which would see them lose about £2,000 a year from their pensions when they reach state pension age. They, like many former employees, believe that this is an unfair and morally questionable approach. Does the hon. Lady agree that that cannot be the right approach and that it must be reconsidered?

[Manuela Perteghella]

Yes. The hon. Member makes a good point.

The lack of transparency allowed this policy to persist under the radar. The formula used is regressive and unfair. For a start, the deduction is based on the full state pension rate one year before retirement, not on salary or actual state pension received. It is then divided by 80 and multiplied by years worked. The result? The longer someone worked and the less they earned, the more they lose. That injustice falls heaviest on women.

[Ann Davies (Caerfyrddin) (PC)]

Former Midland bank and HSBC workers who had a defined-benefit pension saw deductions from their pension entitlement at state pension age, to take account of the payment of the state pension. Those deductions had no link to salary or pension received. Lower-earning staff members, mostly women, were particularly affected, including my constituent Angela Blockwell. Does the hon. Member agree that that inequality must finally be recognised and that pension clawbacks must be abolished for all?

[Manuela Perteghella]

Yes, the practice is a relic from the past and needs to be abolished.

Women have historically occupied lower-paid roles at Midland bank and HSBC. They have taken career breaks to care for children or elderly parents, or have been placed on new contracts with clawback attached—often without being told the implications for their pension rights. HSBC claims that there is no discrimination because the policy applies to all, but indirect discrimination is defined as a policy that appears neutral but disproportionately harms a particular group.

[Alison Hume (Scarborough and Whitby) (Lab)]

A female constituent of mine who has worked for HSBC UK for over 35 years has seen her pension reduced by approximately £850 a year because of a clawback clause that she was never properly informed about when she joined the bank’s defined-benefit scheme. Does the hon. Member agree that HSBC needs to engage properly with the affected employees?

[Manuela Perteghella]

I thank the hon. Member for that valuable point. I have a message for HSBC later in my remarks.

Campaigners have presented robust evidence, including research by the University of Exeter, showing the disproportionate impact on women and low-paid staff. One of the recommendations in the University of Exeter report is for policymakers—us—to consider the suitability of the equal pay provisions that have not been available to members of the post-1974 Midland bank pension scheme, despite evidence of the disproportionate impact on women. When campaigners turned to the Equality and Human Rights Commission, the Department for Work and Pensions and the Government Equalities Office, they were passed from pillar to post. No one took responsibility; no one acted. Equality law does not cover pensions.

Let us not forget that HSBC’s pension fund currently stands at £4.1 billion in surplus after liabilities, but the estimated cost of ending clawback is just £450 million. HSBC has the resources; what it lacks is the will.

[Gideon Amos (Taunton and Wellington) (LD)]

My Wellington constituent, Mike, who is a former Midland bank employee, has seen his pension go down in value by 13% because of the failure of HSBC to honour its obligations. He tells me that the state—in other words, the taxpayer—will be making up some of his income as a result. Given the level of profit that my hon. Friend has revealed, is it not totally wrong that the taxpayer is bearing the burden of the obligation that the corporate giant should be paying itself?

[Manuela Perteghella]

My hon. Friend is absolutely right. It is unfair and we need to ensure that HSBC is accountable.

In correspondence with MPs, the bank states that because clawback is lawful, its policy is acceptable, but I say: lawful does not mean just. This Parliament has a duty to act when the law permits injustice. We need to modernise pension legislation to ensure that it reflects today’s values of fairness, transparency and equality. After the WASPI—Women Against State Pension Inequality—pension injustice, we must be alert to further pension scandals.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Lady for securing the debate. The fact that there are so many hon. Members in the Chamber is an indication of the interest that she has created through her Adjournment debate, so well done to her. There were an estimated 12.95 million state pensioners in Great Britain in 2024-25. As the hon. Lady has said, the WASPI women have been hard done by because of Government decisions made without consideration. There is an onus on all of us in this House to ensure that pension funds are profitable and sustainable. Does the hon. Lady agree that in tandem with enforcing work-based pensions, we must ensure that state pensions can catch up, so that there will still be such a thing as state pensions for the 40-year-olds who are paying their national insurance today, believing that their state pension will be there for them when it comes to the time that they need it?

[Manuela Perteghella]

I thank the hon. Member for raising that important issue. Absolutely, we need to ensure that the Government have a long-term outlook, so that the young working British people of today will be able to retire on a comfortable pension.

We urgently need a full review of pension clawback practices. Many constituents have written to me about other unfair pension schemes, including former police officers and people on occupational pensions that are not protected from inflation.

[Dr Al Pinkerton (Surrey Heath) (LD)]

I congratulate my hon. Friend on securing the debate. Terry, one of my constituents, worked for a large American multinational company. As a consequence of the Pensions Act 1995, he found his pre-1997 pension contributions decoupled from inflation. Because of the nature of inflation, his savings, which he now depends on, have been gradually eaten away and he finds himself in increasing levels of destitution. Will the Minister look at the issue with the seriousness that it requires? It cannot be right that pensioners in our country are suffering as a consequence of decisions made by multinational companies that remain hugely profitable. The issue has a particular geography because so many multinational companies were located in the south-east of England.

[Manuela Perteghella]

I thank my hon. Friend for making that important point. We need legal reform to ensure that pensions in payment are finally brought under the protection of equality law. We also need greater transparency and accountability from pension providers, especially those entrusted with the retirement futures of hard-working people. HSBC’s clawback policy is discriminatory in its impact, misleading in its language and fundamentally unjust in its effect. I therefore urge the Minister to bring forward legislation to put an end to this outdated practice and to finally stand up for those whose voices have gone unheard for far too long. Clawback is just one part of a broken pension system; we must also ask where our pension funds are invested and what future we are buying with that money.

[Lisa Smart (Hazel Grove) (LD)]

I am grateful to my hon. Friend for laying out the case for change so well. She talks about the investments that pension funds are making. I worked for more than a decade in the investment industry, and many of my clients were big public pension funds. More recently, I served as a trustee of one of the largest public pension funds in the country. One of the things that pensioners contacted me about was where their money was going. They would ask, “Is it being used to fund fossil fuel extraction?” or “Is it being used to support some unsavoury regimes around the world?” Does my hon. Friend agree that pensioners should have more power to have a say over what goes on with their money?

[Manuela Perteghella]

I fully agree. It is really important that pensions reflect ethics and morality and that the people investing in them have a voice. It is no longer good enough to see pensions in isolation from sustainability, ethics or morality. Whether it is because of the way in which funds are clawed back from low-paid pensioners or the way in which they are funnelled into destructive, high-emission industries, the system is crying out for reform.

As we look ahead to COP30, billions of pounds of local government pension schemes are still invested in fossil fuels and in industries that drive deforestation, biodiversity loss and wildlife extinction. If we are to build a just and sustainable future, we must build a just and sustainable pension system that protects not only people in retirement, but the planet and generations to come.

Women’s Changed State Pension Age: Compensation

Manuela Perteghella Excerpts

Monday 17th March 2025 Westminster Hall

[Manuela Perteghella (Stratford-on-Avon) (LD)]

It is an honour to serve under your chairship, Sir Edward.

I thank my hon. Friend the Member for South Cotswolds (Dr Savage) for securing and opening this debate, the hundreds of thousands of people who signed this important petition, and the formidable campaigners. An estimated 6,500 women in my constituency of Stratford-on-Avon have been impacted by this pension injustice. Many of them have contacted me to tell me of their feeling of betrayal by those who should right wrongs. For years, millions of WASPI women have fought for justice after being failed by successive Governments. These women worked hard, contributed to our society and played by the rules, only to have their pension age changed without proper notice, leaving many of them financially stranded.

The ombudsman’s ruling was clear: the Government’s failure to communicate the changes caused real financial hardship and those affected deserve compensation. Thousands of these women have died without receiving justice or redress, but what did we hear in December? We heard that the DWP is rejecting the ombudsman’s recommendation that compensation should be paid. Instead of standing up for these women, the DWP has turned its back on them.

Let us be clear—this is not just about payouts. This is about acknowledging the harm that has been done and about recognising the stress, the anxiety, the broken plans, the financial insecurity and the poverty that these women now face.

[Sarah Dyke (Glastonbury and Somerton) (LD)]

WASPI women should be fairly compensated. Just this week, I spoke to a woman who lives in the village of Street in my constituency. She worked hard for 40 years, but has recently been made homeless—she has been evicted—as a result of not receiving fair compensation. Does my hon. Friend agree that the Government should reverse their decision and give WASPI women the compensation they deserve?

[Manuela Perteghella]

I fully agree with my hon. Friend. I too have heard of women who have had to keep working despite ill health, and who have had to use up all their life savings but still face poverty now.

The Liberal Democrats have long stood with WASPI women. We made a manifesto commitment to fight for fair compensation and we will not let this issue drop. The Conservative Government failed to implement the recommendations. This Labour Government had a chance to do the right thing, and they still have that chance. Please do so. We will not stop fighting until these women get the compensation they deserve. It is time for this Government to listen, to act and to deliver justice for WASPI women.

Women’s Changed State Pension Age: Compensation

Manuela Perteghella Excerpts

Wednesday 15th January 2025 Westminster Hall

[Sir John Hayes]

The hon. Gentleman is right and he encourages me to turn to the ombudsman’s report, which I have before me. Members will be pleased to note that, although I have inserted many tags into my copy of this report and the previous one, I will not refer to all of them. That would take forever.

Suffice it to say that the ombudsman found

“maladministration in DWP’s communication about the 1995 Pensions Act resulted in complainants losing opportunities to make informed decisions about some things and to do some things differently, and diminished their sense of personal autonomy and financial control.”

The ombudsman’s remedy is set out at the end of the second report. Ombudsmen recommend recompense on a scale—a series of levels, from 1 to 6. The report is here for everyone who has not studied it in detail to see: the ombudsman recommended a level 4 response. That means

“a significant and/or lasting injustice that has, to some extent, affected someone’s ability to live a relatively normal life.”

It suggests that the recompense might be between £1,000 and £2,950.

[Manuela Perteghella (Stratford-on-Avon) (LD)]

Will the right hon. Gentleman give way?

[Sir John Hayes]

I will in a second.

That suggestion seems to me to be a pretty modest response. It is not extreme, extravagant, unrealistic or unreasonable. It is a modest, measured response borne of the fact that the ombudsman has found maladministration. I have read the two reports. Having been in this House for a long time, been on the Front Bench of my party for 19 years and been a Minister in many Departments, I have rarely seen an ombudsman’s report as clear as this one about maladministration by a Government Department. On that note, I give way.

[Manuela Perteghella]

I thank the right hon. Member for giving way. Does he agree that rejecting the ombudsman’s recommendations for the compensation of WASPI women undermines the role of independent bodies in holding the Government to account? If we cannot rely on the Government to implement such findings, what message does that send to the public about justice and fairness?

[Sir John Hayes]

That brings me to the constitutional point that I said I would make. I have established an ethical case, but there is a constitutional issue about the ombudsman. Over the years, we have developed a number of ways of holding the Executive to account. Parliament does that, of course, but there needs to be other means of doing so on particular and specific issues. That is why the Select Committee system emerged: as a way of studying what the Government were doing and making recommendations accordingly. That is also how ombudsmen began. They are an additional mechanism through which Government can be held to account, but for Select Committees and ombudsmen to have meaning, they must have teeth.

Income Tax (Charge)

Manuela Perteghella Excerpts

Monday 4th November 2024 Commons Chamber

[Manuela Perteghella (Stratford-on-Avon) (LD)]

While I welcome aspects of the Budget, including investment in the NHS and the review of carer’s allowance, I want to express my deep concern about the negative impact that this Budget will have on family farms and rural communities. Farmers in my constituency are already navigating immense financial challenges, from the rising cost of machinery and equipment to punishing weather patterns—repeated heatwaves and flooding—and now face increases in national insurance contributions and changes to agricultural property relief. For Derek Wilkinson, one of the hard-working farmers in my constituency, the increases to national insurance contributions could mean £490,000 in extra costs this year alone, reducing the amount of money available for investment in the farm.

With the changes to agricultural property relief, the Government risk imposing a family farm tax that could sound the death knell for countless small family-owned farms across the UK. Farming is a way of life, often passed on from generation to generation, but the next generation of farmers faces a tax bill just to be able to continue to farm. These changes are not only unfair, but deeply short-sighted: without support, family farms will increasingly fall into the hands of large multinational corporations, eroding our rural communities and threatening our domestic food security. For example, as one of my family farming constituents wrote to me today, land value is much higher than the earning capacity it holds. If my constituent were to sell part of their land or another asset to pay the tax bill, that would render their business unviable.

Farmers are not only custodians of the land: they are the backbone of our rural economy, yet under this Budget, they will be forced to make painful cuts or, in the worst cases, sell their land. The Government should focus on reversing tax cuts for the big banks and asking large corporations such as the social media giants to pay their fair share, rather than placing the burden on hard-working farmers and rural businesses. If we truly value our farmers, we must protect not only their ability to continue to farm and plan for succession, but Britain’s proud tradition of small, independent family farms—farms with roots stretching back generations. Farmed land is not merely a financial asset: it is a legacy of community, stewardship, sustainability and high standards of food production. We must stand by our rural communities and ensure family farms have the support they need to thrive for generations to come, so I urge the Government to review their policy so that family farms are not penalised.

Carer’s Allowance

Manuela Perteghella Excerpts

Wednesday 16th October 2024 Commons Chamber

[Manuela Perteghella (Stratford-on-Avon) (LD)]

I praise hon. Members for their excellent contributions and maiden speeches.

Unpaid carers are the hidden backbone of our social care system. Whether they are parents or grandparents caring for children with special educational needs or disabilities, individuals supporting a spouse or sibling, or those stepping in to care for a relative in need, those carers provide tireless support with little recognition or help. We have already heard from my hon. Friends and from Members across the House about the scandal of the carer’s allowance overpayments and their devastating impact on families up and down the country. In my constituency, countless carers are doing extraordinary work, often at great personal cost. Many are struggling to balance their caring responsibilities with their own health, their financial stability and—for some—even their jobs.

The weight of those responsibilities can be overwhelming, especially without access to proper support services such as respite care. We need a statutory guarantee of respite breaks for carers, because those breaks are essential for giving carers the time to rest and recharge so that they can continue providing vital care. At the same time, we cannot ignore the financial pressure that carers face. Carer’s allowance is simply not enough to live on: it is the lowest benefit of its kind, and it is unacceptable that carers—many of whom are unable to work due to their caring duties—are left struggling to make ends meet. We need to see a fair increase in carer’s allowance and an uplift of the thresholds, which would make a real difference for families in my constituency, ensuring that carers are not forced into poverty while looking after their loved ones.

If you will allow me, Madam Deputy Speaker, I also want to raise the issue of care provided by young people. In Stratford-on-Avon, many young people in full-time education are balancing schoolwork and studies with caring for a parent or sibling, often without the support they need to succeed in both roles. I would like young carers’ voices to be heard in the Government’s review of carer’s allowance: no young carer should be left behind simply because they have taken on the responsibility of caring for their loved ones. The Government must set an urgent timetable for reviewing carer’s allowance and simplify the system to show carers that they are valued for the essential work they do in today’s Britain.