Pensions Strategy

Thérèse Coffey Excerpts

Thursday 20th March 2014 Commons Chamber

[Steve Webb]

As the hon. Lady knows, there are redress mechanisms for people who receive poor quality independent financial advice. It is a regulated process. [Interruption.] I cannot hear what she is shouting at me. When there is a process of regulated advice, there are compensation mechanisms, which is right and as it should be.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

I have to thank my hon. Friend because the statement and what was announced in the Budget yesterday take pensions to a whole new level. Now we have the single-tier state pension, we can free people to make their retirement decisions. Frankly, the Opposition do not seem to recognise the issues that people on defined contribution schemes have had or how annuities have fallen, so I really welcome what he has said today. In particular, will he tell us a bit more about when pensioner bonds will come into effect?

[Steve Webb]

Certainly. My understanding is that National Savings and Investments will bring forward pensioner bonds next January. The Chancellor has indicated that the gross interest rate will be about 2.8% for a one-year bond and about 4% for a three-year bond, but that will be reviewed later in the year. It depends on market movements between now and then, but it is designed to be a market-leading rate to recognise that people who have worked hard and saved hard should get a decent return on their money.