Pension Schemes Bill

Debate between Steve Webb and Richard Fuller

Tuesday 2nd September 2014 Commons Chamber

[Richard Fuller (Bedford) (Con)]

The Minister is rightly saying that this Bill is part of a series of measures the Government have undertaken to increase pensions for people. Is the number of people in the auto-enrolment process higher or lower than expected?

[Steve Webb]

I am grateful to my hon. Friend for that question. The number is substantially higher. I had to apologise to the Select Committee in oral evidence recently that we had grossly underestimated the success of our policy. We had thought that the staying-in rates for workplace pensions might be as high as two thirds, but in reality the number of people who, having been automatically enrolled, are staying in is touching nine tenths. Even so, with each passing month, as new figures come out, the sceptics keep saying, “Oh, as we get to smaller firms, the opt-out rates will shoot up,” but we are certainly seeing no evidence of that so far. I think there is a sense that people knew that they needed a pension and knew the value of an employer contribution and tax relief, and when we remove the barriers for them they are delighted to accept it.

Quality Workplace Pensions

Debate between Steve Webb and Richard Fuller

Thursday 27th March 2014 Commons Chamber

[Steve Webb]

There is a perfectly straightforward answer to the hon. Lady’s question. When we asked firms to enrol their staff automatically, we asked them to plan 12 months ahead, because it takes a long time to set up a pension scheme, to choose a pension scheme and to communicate with scheme members. A firm sitting down today to plan for April 2015 knows the rules of the game today so that it can choose its scheme in an informed way. She asked why we have allowed a further year for commission and active member discounts. Clearly, if either of those takes a scheme above 0.75%, which many do, they will have to comply immediately in April 2015, but many of those are based on complicated contractual arrangements in pension schemes. We have to strike a balance between unpicking all those and focusing the pensions industry on delivering automatic enrolment, which is a key priority for the next 12 months.

[Richard Fuller (Bedford) (Con)]

Whether the Select Committee or the shadow Pensions Minister wish to claim credit is of secondary importance to my constituents, who today can feel a little more confident that they are not being ripped off. I thank the Minister for actually doing something about this, rather than just claiming credit. One of the most important things is that people can easily see what charges will be imposed in future. How will his proposals help to make that clearer for people?

[Steve Webb]

I am grateful to my hon. Friend for his kind comments. The challenge with this market is that the people buying the pensions are essentially the employers of the firm, not the staff. We need to ensure that when firms are shopping around for pensions for their workers they get clear and straightforward information about what the charges will be and that they will be capped. Scheme members clearly need to be able to access information about charges in a straightforward and transparent way. It is a slightly odd market, because people are buying on their behalf and, because of automatic enrolment, scheme members cannot negotiate a different price; they just have to take the price they are given. Our focus is therefore very much on ensuring that the people who make the choices on pensions—in this context, the employers—have clear advice and the cap to ensure that they and their members cannot be ripped off.

Oral Answers to Questions

Debate between Steve Webb and Richard Fuller

Monday 1st July 2013 Commons Chamber

[Steve Webb]

I think my hon. Friend might be referring to the idea of a total welfare cap, and while the Chancellor of the Exchequer has explicitly ruled out the idea of capping state pensions, I understand there are others in this House who are prepared to cap state pensions.

[Richard Fuller (Bedford) (Con)]

7. What assessment he has made of the performance of the Work programme in helping young people into work.