Savings (Government Contributions) Bill (Second sitting)

Peter Dowd Excerpts

Tuesday 25th October 2016 Public Bill Committees

[The Chair]

Welcome to this afternoon’s hearings. I call Peter Dowd to start the first set of questions.

[Peter Dowd (Bootle) (Lab)]

Q 4747 The proposal for the lifetime individual savings account followed a wider public consultation about the future of tax relief in pension provision. How do you think the LISA, as proposed, fits into that wider public debate? Mr Surtees first.

Joseph Surtees: I am afraid that, as an organisation, we have no particular views on the LISA. We are very keen on any proposals that the Government can bring forward to boost both short-term and long-term savings, and I think with the LISA we are still going over detail.

Ed Boyd: I am afraid I will not be much more help. Our focus has very much been Help to Save, and that is what we have been doing research on. I can give a personal view, but it probably won’t be too beneficial.

However, the one thing I think it would be worth saying on the LISA side, and it is more of a comment than anything else, is that if you look at the panoply of savings products within LISA and Help to Save, in 2021, only 8% of those funds are budgeted in the impact statement to go towards Help to Save. That falls within an approach that this is about the “just about managing”. Those who are on universal credit—they are kind of in-work, but we would love them to be earning more and trying to progress up the earnings ladder—are the “just about managing”, I think. The majority of the people on universal credit when it is fully rolled out will be in deciles two to five. So it’s just a question about the balance between the two—LISA and Help to Save—but I am afraid I have no detailed comments on the LISA itself.

[Peter Dowd]

Q Given that response, I will try another angle. Some of the suggestions that we have had about the LISA are that although it might well be a simple product on its own, in the context of a wider market full of God knows how many products it just complicates things. Do you have a view on that?

Joseph Surtees: I suppose that in terms of how it fits into the wider market, the point Ed makes is very interesting, which is that if you refer back to the ISA itself, people earning about £80,000 are twice as likely to have an ISA as people earning the average income, which is £26,000. So the savings crisis, if I can put it like that, is among the very low earners. When products come forward in tandem, like LISA and Help to Save, it is important to ensure that they both have equal weight and an equal offer, and that they both appeal to the right markets.

[Peter Dowd]

Q Okay. If we’re talking about encouraging people to save in one fashion or another, do you think that Help to Save adds to that in any substantial way? Will people save significantly more as a result of it?

Ed Boyd: So the question is: do we think that it will help? I think the answer is yes. There are always little bits to tweak and improve, I guess, as the Bill goes through, but as a whole—I mean, the idea of Help to Save is a fantastic one. When you look, as the CSJ does, at the root causes of poverty, we very purposefully have as one of the five—alongside worklessness, addiction, family breakdown and things of that ilk—problem debt. The majority of the people who we are talking about, especially when they have just moved into work, are only working 16 hours on the national living wage, which this will apply to, and will often have very little savings.

It is about the unexpected shots, and StepChange’s research on this is brilliant. It shows that every six months or so there might be something, such as a washing machine that breaks down, or something else, and if you have no savings, the effect that can have on you—not just in terms of, “Oh, we have to go to slightly higher-cost credit”, but on your mental health, and how productive and efficient you are at your work because your mind is continually filled with the debt problems that you are trying to carry—is hugely significant. So, anything that can try to create a culture of saving and provide some Government backing to incentivise people to save more is a wonderful thing. It is a great thing to add to the armoury.

Joseph Surtees: I certainly agree. We are very big supporters of Help to Save. The research that we carried out, which Ed is referring to, found that if a family has £1,000 saved, that reduces the chance of them falling into problem debt by 44%—so we think that Help to Save will really help in this area. To agree with Ed again, there are little tweaks that would help to increase its appeal. When it was introduced in the Budget, the potential eligibility for the scheme was 3.5 million, but the impact assessment says that it will probably only reach about 500,000. When looking at the Bill and the way that Help to Save and its features are going to be rolled out, the question is: how do we get that 500,000 closer to the 3.5 million figure?

[Peter Dowd]

Q Can I just ask, on that basis, how well targeted you think Help to Save is on those with the lowest income? It is all very well to say “Save”, but if you have no money because you are on benefits or have a low income, how well targeted is that particular product?

Joseph Surtees: I think it is almost as well targeted as it could be without putting a huge onus on banks and, in a scenario in this case, running de facto means testing. We could possibly open up the eligibility. I know that the Institute for Fiscal Studies has done some work on this—which I have one or two questions about—but as a basic proposition it is pretty well targeted at the group that needs the savings the most. If you look at the figures, almost half of families with an income below £14,000, a category that a lot of the Help to Save target families fall into, do not have savings. We have one specific issue, which is to do with how it will help people under 25. That is very much to do with the benefits rules, which I can either discuss now or come back to later.

[Maria Caulfield (Lewes) (Con)]

Q I want to touch on one of the points raised in our previous evidence session, which was that someone can withdraw money from this lifetime ISA if they want to buy a home, but if they want to withdraw money for any other reason—you touched on some examples, such as if their washing machine breaks down or they have an urgent need to get money quickly—they face a penalty of between 5% and 6%. Are there certain criteria you would like to see where there are other options to withdraw money without hitting a penalty?

Ed Boyd: As I said before, the detailed knowledge, in terms of the research that the CSJ has done, is on the Help to Save side rather than the ISA side of things. There is a valuable question about the accessibility and flexibility of accessing savings within Help to Save. I could give a comment on that—perhaps it is applicable across to ISAs. I would need you to be the judge of that.

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[The Chair]

We will now hear oral evidence from Union Pension Services Limited. Will the witness please introduce himself for the record?

Bryn Davies: My name is Bryn Davies. I am the director and actuary of Union Pension Services, which is a specialist consultancy helping trade unions with a range of issues involving pensions, both state and occupational, and of course saving.

[Peter Dowd]

Q I wanted a sense in the round of how you think the proposals in the Bill for LISA and Help to Save demonstrate a coherent approach to the Government’s objective of making it easier for everyone to build up savings as they need. How do they fit into that landscape?

Bryn Davies: It has to be recognised that these measures come out of the more fundamental review that was undertaken of taxation and provision for retirement. I do not think it would have come out now and in this form, particularly the LISA, without that preceding process. That process identified that it is difficult—the whole issue of how tax advantages are used to encourage people to provide adequately for their retirement is difficult. There was plenty of speculation in the press that the last Chancellor had made up his mind about some fundamental changes, primarily in pension taxation. He pulled back from that and came up with the three-pronged approach of increasing the ISA limit, introducing the LISA and Help to Save—which, set against that background, are relatively minor and unco-ordinated. I do not think anyone would say that they are a comprehensive approach to making sure that people provide properly for their retirement.

The LISA is functionally equivalent to the proposed pension ISA, which was much debated, though it has a different name. The particulars may not be as was proposed by the arch-proponents of a pension ISA, but functionally it is a pension ISA. Seen globally though, it is a pretty trivial contribution towards the much bigger problem. There is widespread acceptance that pension tax relief is a problem that needs to be dealt with. In that context the LISA is pretty limited, and Help to Save is obviously a very limited proposal that does not really fit within that scope at all. In terms of a comprehensive approach to the problems of making sure people save what they need, it is lacking—and I do not think anyone would be able to pretend otherwise.

This is something that I do not often say, but I very much agree with Richard Graham MP that we need a comprehensive approach. He has spread it a bit wider than I would: he is proposing that there should be a commission on saving. What I have argued for is that there should be a continuation of the Pensions Commission in one form or another to tackle the specific issue of tax relief. The Pensions Commission, which must be regarded in many ways as a great success, pulled back from tax relief—they sort of dodged it—but I think they or some successor should take on that issue and produce a comprehensive review. Set against that, the LISA is too little and too early. Unless you undertake a fundamental review of pension taxation, I do not think that the LISA really makes a lot of sense.

[Peter Dowd]

Q In that sense, given that there does not appear to be any appetite for any substantial review of the sort that you are talking about, let us take it at face value that that will not happen. Do you get the sense that this is—I will not say a gimmick, but simply the Government feeling that they have got to do something by chucking another product into the market as a smokescreen, or call it what you will?

Bryn Davies: I would not like to use the word “gimmick” but it was a policy in search of a solution rather than the other way round. The proposal for the LISA was seen as something that could be said to have come out of that earlier process, and not coming out with anything would have given the appearance of a significant failure in policy making. In that sense, it was seen as the least that could be done as part of that process.

The problem with it is not just that it does not fit—the argument I am making is that it does not fit within this broader review of how savings for retirement should be tackled—it is also problematic in itself. I watched your sessions this morning and I think the case has been made. There was some evidence in support but also, to my mind, powerful evidence pointing out the problems with the LISA, particularly in the context of the roll-out of automatic enrolment, which is a major concern in the trade union movement.

It is absolutely crucial that whatever comes out of the legislation should not in any way interfere with the completion of the process of automatic enrolment. It is particularly concerning that LISAs will start hitting the streets, as it were, at the same time as automatic enrolment is going to face its biggest test, when the contribution rates go up from their present very low rates to the full joint 8%. That is my major concern.

There will be such mixed messages that a lot of people will make wrong decisions at that time. The two processes should be disentangled. That is the simplest way. I know we are a long way down the road and evidence this morning from the industry was strongly that they just want to get on with the job and get these things delivered, as promised by the Government, from next year, but sufficient concerns have been raised about the interaction with automatic enrolment that it would be worth putting it off, to disentangle those two processes of people starting to sell LISAs at the same time as people start getting these increases in their contributions from the current level, as far as individuals are concerned, of up to 5% gross.

[Peter Dowd]

Q Can I take this in a slightly different direction? I suppose it is linked, to some extent, to some people’s concern about self-employment. That is perfectly legitimate and okay, but there are many people in effect being forced, de facto, down the self-employment line to take pressure off employers to pay national insurance and so on. Are there concerns that employers will encourage their employees to choose a LISA instead of a workplace pension, in effect reducing their contributions?

Bryn Davies: Of course, there are rules about enticing people away from automatic enrolment, and we want to see those enforced. The implication is that if people were offered a genuine choice, LISA would have to be better than the automatic enrolment offer. I am sure there will be some employers who decide to go down that road.

On the question of the self-employed, it has been identified that automatic enrolment does not really work for them. It is possible that something like a LISA would offer them something that can work alongside automatic enrolment for employees. That is leaving to one side the whole issue of whether this growth in self-employment is genuine self-employment or just a way of evading employment law by forcing people into self-employment when they should be employed—but that is a much broader issue, on which I am not an expert.

[Huw Merriman]

Q Mr Davies, could you help me a little? I have not come across Union Pension Services Limited before. Is there a formal link to the trade unions or do you represent anyone?

Bryn Davies: No, no—I am just an honest professional working to make my bread, but working just for trade unions. I work as a consultant to individual unions.

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[The Chair]

We will now take oral evidence from Scottish Friendly. Could the witness introduce himself for the record?

Calum Bennie: Good afternoon. My name is Calum Bennie. I am a communications manager at Scottish Friendly.

[Peter Dowd]

Q You have indicated in the past that,

“We at Scottish Friendly, while recognising LISA will not garner universal support, are enthusiastic about the initiative. It deals with one of the biggest problems society faces in the UK: trying to get under 40s to engage with planning for their retirement.”

[The Chair]

Could I ask the hon. Member to speak up?

[Peter Dowd]

Yes, I beg your pardon. When Paul Johnson of the Institute for Fiscal Studies came to address the Treasury Committee, he said he did not think that the lifetime ISA would encourage new savers. There seems to be a difference of opinion, although I am not saying that there is. Why are you so enthusiastic about it?

Calum Bennie: New savers are one issue, but we are supportive of the LISA because what it could do is attract people who are currently put off saving for life after work. They are not enamoured of pensions—they have been put off pensions for whatever reason, be it a bad experience of their own or bad experiences that their families have had. They are not interested in pensions per se. The lifetime ISA could be a way of them putting money aside for their retirement, which otherwise they would not have done. That is where we come from here.

[Peter Dowd]

Q Following on from that—I was trying to tease this out earlier—I get the sense that this is another product: “This one hasn’t worked, so let’s introduce another one; that one hasn’t worked, so let’s introduce another one,” or, “People aren’t saving for retirement, let’s introduce another one.” It begins to sound as if we are saying, “Let’s just try another thing. None of them work particularly well, but let’s just chuck this into the mix.”

Calum Bennie: I do not think we would disagree with that. As several people have said in the time that I have been in the meeting this afternoon, a more holistic approach to savings and pensions—or saving for life after work, as we would perhaps put it—needs to be looked at. In the meantime, though, we need to do something to get more people putting money aside for that period in their life. As has been raised several times, a key group of people who have not been saving for life after work or have been disadvantaged in doing so is the self-employed. There is a clear benefit from the lifetime ISA, at least for that group. From our point of view, it is quite clear that there is a group of people who are not interested in pensions. They have been put off pensions. This represents a way for them to put money aside for their future.

[Peter Dowd]

Q I have another quick question. The witness speaking before you was asked about evidence. I would ask you, what is your evidence that this will make people save? What evidence is there? You say that there is a flexibility in the system, but what is the evidence for encouraging this specific product to encourage people to save more? That was clumsy, but you get the gist.

Calum Bennie: When you introduce a product or investment that has clear advantages, as this one does, it will attract people to save. We have got quite a long experience of incentivised investment products for all sections of the community. In particular, our focus is on those with low to modest incomes. As a company with roots as a friendly society, for the last 30 years we have focused, initially, on friendly society tax-exempt savings plans. There was a clear tax advantage with those.

Twenty-five years ago, the minimum investment was £10 a month, and that attracted a substantial proportion of C2 and DE investors to put their money in those plans. In more recent years, the child trust fund was introduced. That is certainly going to help a reasonable group of people when they reach 18 with a reasonable start in life, and that has obviously then translated into the junior ISA. We were also a proponent of the insurance ISA that is no longer here, which attracted a mid-group part of the population that may have been put off by stocks and shares ISAs before.

That is why we are pretty certain that this product will also be taken up. It will not be by everyone, because there are going to be clear wealth warnings against it. If we were to introduce it, we would certainly need to make clear what you would be getting yourself into if you decided to try to access the fund before age 60—if you were saving for that length of time. But, all things being equal, savers do know what they are letting themselves in for. In our experience, a lot of savers like the discipline that they cannot touch the money. We have done focus group after focus group and that constantly comes up. That is why they like some of the products we offer—because they are long-term—and that could be a key incentive for something like this.

[James Cartlidge]

Q I was very interested in your main point. May I just clarify? Obviously there is this attraction for those who are self-employed, but are you suggesting that, perhaps because of a lack of faith or trust in pensions, even those who might actually be better off focusing on the pension side will simply be attracted to this, as it is something they have more trust and understanding in? Is that your basic point?

Calum Bennie: Yes. There are clearly some people who just do not want to touch pensions for whatever reason. The fact that we are having to force people into pensions is almost an indication that for many people, pensions are broke. We are not saying that pensions are bad and LISA is good; we are just recognising what is out there with people and that some people are very comfortable with ISAs.

We were one of the first friendly societies to introduce several ISAs in 1999 when they came out. More recently, we have moved away from friendly society tax-exempt plans, because they were inflexible, to a much more flexible ISA. We launched that five years ago. That was quite a risk. We did not quite know whether the market that we were aiming at—as I said, that is very much the low to mid-income group of people—would take ISAs, because it is a stocks and shares ISA that we market; it is not a cash ISA, because we are offering people growth potential. So there is a learning experience that people perhaps have got to think about before they invest in this, because it is a stocks and shares ISA, but it has been very successful in terms of the take-up of those ISAs.

In our experience anyway, because we are not focusing on the wealthy and well-advised, people are comfortable with ISAs; not everyone is comfortable with pensions. Therefore, this product, in the short-term perhaps—until a more holistic set of savings plans and investment plans, which perhaps has cross-party support, comes about—could attract lots of people who would otherwise not put money aside for life after work.

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[The Chair]

We will now hear oral evidence from MoneySavingExpert.com and the Women’s Budget Group. Could the witnesses please introduce themselves for the record? I start with Martin Lewis.

Martin Lewis: Yes, I am Martin Lewis, founder and executive chair of MoneySavingExpert.com.

Jonquil Lowe: Hi, I’m Jonquil Lowe and I am senior lecturer in economics and personal finance at the Open University, and part of the policy advisory group for the Women’s Budget Group.

[Peter Dowd]

Q I will make an assertion here: I think the consensus of opinion today is that the pensions landscape is broken. However, in the absence of more structural change to that landscape, any product that helps—even if it is only a little bit and even if it’s for a limited number of people—is welcome. Mr Lewis, you have made this comment about the LISA:

“For retirement savings it works the same way, but whether it beats a pension or not is a much trickier conversation.”

Could you give us a view about that consensus claim that I just made?

Martin Lewis: If we just look at lifetime ISAs as a pension product and ignore the homebuying element, which of course is a substantial element, based on pure numbers—well, actually there isn’t really anybody who should get the lifetime ISA, if you’re contrasting it with a pension. Certainly, if you are employed, you want to be auto-enrolled. If you are not employed and are a higher-rate taxpayer, there is a clear distinction—it is far better to be in a pension than it is to be in a lifetime ISA. If you are a basic rate taxpayer, the numbers are much of a muchness, but you have the two key factors: one, in your inheritance tax planning, the LISA is part of your estate, whereas your pension isn’t; and, two, LISA counts for benefit cap purposes, which could have a massive effect on many people, whereas the pension doesn’t. Those two factors mean that if you really break it down and make this a black-and-white binary decision, don’t put your money in a LISA.

Having said that, there are some people, especially self-employed basic rate taxpayers, for whom the idea of putting money away into one of these schemes is attractive, and therefore I support this as a good concept. Remember, we are only talking about pension saving there; not the other side, where it is a complete, utter no-brainer. Do you want a house? Put your money in a lifetime ISA. There are some arguments about whether Help to Buy is not in those transitional arrangements and I have issues with the help to buy ISA, but overall it is a no brainer.

I think my great concern over the lifetime ISA, though, is the one that goes back to the point about explaining a product that has a level of complexity, although it is not that complex. In my career, I have learned that what people want—I have just told you what it is—is a trusted source. That is enough for most people— a trusted source who says, “Don’t put your money in a lifetime ISA rather than in a pension unless you are a basic rate taxpayer who is self-employed.” There you go. People do not really need to know why. You have put the proofs: you’ve seen it on the website, so you are therefore on it. That is pretty much all you need.

All products are complicated, so we make them simple. You get trusted sources to do that, and it works. My great concern, and I have the same concern with Help to Save, is not the product in itself—I support both of them—but that there are certain dangers in misprioritising your finances. In the lifetime ISA, the danger is in wrongly opting out of auto-enrolment and putting your money into a lifetime ISA. In Help to Save, it is not paying off your expensive debts, and saving when you should be paying off the expensive debts.

I am aware that there is a new guidance system being set up, which is right and I approve of that. The problem with that is that you have to be proactive to go there. I would strongly urge you, when you set these up—it is much easier with the National Savings and Investments product—to ensure that at the point of application, whether that be online, by phone or in branch, the questions are asked, and that people are forced to ask them. So at NS&I, when you are setting up the Help to Save, it asks you, “Do you have debts? Are they expensive?”. If they are, some information is given about the fact that you may be better off paying those down. You do that not in a leaflet, but at the point of application.

With the lifetime ISA, which in many cases will be an online or on-the-phone product, rather than a branch product, I would say at that point in the online form, the question should be asked, “Are you an employee? Does the employer have auto-enrolment? Are you planning to do this instead of a pension?” and at that point, information is given that explains that generally you will not be better off with the lifetime ISA.

There is no problem with the product; there is a problem with how we communicate it and how we stop people making bad decisions. The way that you do that in the world that I work in is you signpost it once, you signpost it again, and then you signpost it a third time, and now you might just be starting to start the process. I will tell them when I talk about it on the telly or on the website; you will have it in a brochure for the product; and you will hear it from the pension guys. Then when you are signing up, you will have a final warning. If we do that, we will probably touch 50% of the people we should, but not all of them. That is my biggest caution to you today: just make sure that people know when it is not right for them. Then we can all be very excited about two new products that are out there, and which should, in general, be beneficial to the people who should be using them and are a good thing.

[Peter Dowd]

Q Can I pick up that last point on knowledge? That is another issue we have touched on today. In an ideal world, people have complete control of their faculties and decision making, and have capacity and so on, but out there, that does not always happen. The concern that has been expressed today is about that knowledge landscape, and people’s ability to grasp that, without it sounding patronising. Do you think that, out there in the world that this product will be sold in, there is enough information and knowledge for most people to make a reasonable decision?

Martin Lewis: I do not think there is now, because the products are not out there. The truth is that it is mainly people in this room and the industry, and a few nerds like me, who will be interested in them before they launch—why would you be? Once they launch, we need to get it right. For my TV show, next February, I have already got a lifetime ISA special booked in; it will probably be the second or third week of February—half an hour of prime time on ITV—and we will get the message out, because people need to understand how it works. We will get that out, but that communication needs to be right and consistent; the messaging needs to be right.

My concern is about product-provider level, where product providers and different people within businesses have incentives to sell products. Even in wonderful building societies, the savings managers do not ask their customers whether they have debts before they encourage them to save. Will you do it as a blanket? That is not the right way for anybody to go.

As we are starting two new products, we have a very interesting point where you can set up the regulation before we start to make it proactive, which is what I am encouraging. With Help to Save, the message is: “If you save £50 a month, after a couple of years, we will give you 50% on top.” Yes, I know there are complexities about exactly how much you have saved and whether you can take it out, but that is all you really need to know. For the lifetime ISA, it is: “You can save up to £4,000 a year. You have to be under 40 when you start it. Then you can use it towards a house, in which case we will give you the bonus then, or at the age of 60, when we will give you the 25% on top, with a maximum bonus. If you have ifs and buts, do your reading—but do your reading.” Those are all the messages that you need to get people interested in it.

These two products have a very simple advantage: it is called free money. Go and have a look at the green deal. Until the cashback section came in, no one was interested in the green deal. Once you started giving people free money, suddenly it became very popular. Well, you have two free money schemes. Done right, talked about right and communicated right, they will be very popular. Unintended consequences are possible—the lifetime ISA might pump the housing market, which is a concern, and we have already seen it somewhat with Help to Buy—but done right, this is free money for people. As for looking at this at a macroeconomic level—are we skewing it? Are we giving it to the wrong people? Does it have the right political consequences?—that is not necessarily my bag, but I have some concerns over it. However, if you are talking about whether you can communicate these products in such a way that people will take them up, free money does a pretty good job of getting people interested.

[Peter Dowd]

Q Thanks. I have a question for Ms Lowe. I do not know whether you have a comment on my original statement. If you do, please feel free to give it. Also, a distributional analysis by the Women’s Budget Group shows that by 2020, single female pensioners will experience a whopping drop in living standards. Is there anything in this product, for the sake of argument, that you think will help to deal with, alleviate or mitigate that?

Jonquil Lowe: No, we do not. That is the short answer. Martin touched on this: is the money being given to the right people? Certainly the lifetime ISA is less regressive than the existing system of pension tax reliefs, in that it gives a flat-rate 25% bonus to everybody. However, we still think that this is a very regressive way to use taxpayers’ money. Simply making a product available to everyone does not make it gender-neutral. You also need to take into account people’s opportunity to take up these products.

The lifetime ISA targets people who can already afford to save. There are huge swathes of people, mainly women but some men, who are contributing to the economy in the form of unpaid work, rather than paid work. Their decisions on care—caring for children and adults—mean that they are more likely to be in part-time work and are more likely to have periods out of work. When in work, they are more likely to be in sectors where their earnings are low, which tends to affect them not just at that time but for the rest of their working life. It is much more difficult for women to take advantage of these products, so we do not really see the lifetime ISA as a solution to women’s poverty.

We are also concerned, as Martin said, that the lifetime ISA may be a simple product, but it throws up complex decisions. The worry is that people may well choose to go with the lifetime ISA, rather than a pension, simply because it seems a simple product and they feel that they have more control, but in doing so, they are going to lose the employer’s contribution under automatic enrolment. They will be making decisions that are actually not in their best interests, which is a concern to us.

[David Rutley]

Q Mr Lewis, you mentioned some concerns about transitional arrangements between help to buy ISAs and LISAs. Could you expand a little on that? I then have a question to both of you. One of the issues with financial service products is getting younger people interested in them. The great thing about the lifetime ISA is that it applies to youngsters at 18. We have some young people in the audience from Macclesfield. How would we seek to get young people more interested in these products early on?

Martin Lewis: First, there is a difference between the two. The help to buy ISA is available at 16, which is one issue. The second issue is that help to buy ISAs are limited to properties worth £250,000, or £450,000 in London, but for the lifetime ISA it is £450,000 across the country, which is a good thing.

Here’s where it gets rather complicated. You can use a help to buy ISA effectively after three months. You need £1,600 in it; that’s £1,200 in the first month, and £200 each month for two months. We have some people who have done it in two months and thirty days. We are allowing people to transfer their help to buy ISA into the lifetime ISA within the first year, which is a good rule, because it allows people to move it across and then they can put more in their lifetime ISA. However, the lifetime ISA has a one-year minimum hold before it can be used on cash, so I could have had a help to buy ISA for three years, transfer it across into the lifetime ISA and then save more money in, and then suddenly discover that I cannot buy the house that I want and have found, even though I have been saving in the help to buy ISA for three years, because I have to have held the lifetime ISA for a year.

A simple arrangement to fix that would be to ensure that the trigger-point, if you transfer a help to buy ISA into a lifetime ISA, is the start-point of the help to buy ISA, not the start-point of the lifetime ISA, so you would have had your year. Those are the types of transitional arrangements I am talking about. They are not big-picture, I think, even at this stage of a Bill Committee, and they are ones that we have had a discussion on the phone about.

The other classic thing that I would be very wary of—I will throw this in while we are talking about this—is that, as I have suggested, both these products will not be perfect. There will be unintended issues, such as the help to buy ISA issue—that it was a mortgage deposit, and some people thought it would exchange. It always was at that point, but it was revealed by the newspapers. I would strongly suggest that with both these products, there is a pre-arranged one-year review, where minor terms can be tweaked to make better products, and where we discover the things that none of the clever people who have given evidence or who are sitting around the table have thought of yet. That’s a sensible way to introduce products such as these, which are so complicated—especially the lifetime ISA—to be honest with you. Those are the types of transitional arrangements I am talking about. Forgive me, what was the second part of your question?