Pensions Bill

I am sure that there is at least one retired clergyman who would declare it, but my noble friend must surely accept that we are dealing with unquantifiable costs, because they are so minute. That is not how the psychology of this would work. As to Amendment No. 25, my noble friend again said that pension credit was very different from other benefits because it had no upper cash limit on the level of capital. That is, of course, true, but only in a notional sense. Although the first £6,000 is clear, thereafter you deduct £1 for every £500, which means, effectively, that you run out at between £12,000 and £15,000. So you do not need a capital limit because the notional income will get you there at any rate. Although his words are true that there is no limit, in practice there is because pension credit effectively means that, if you have capital of more than about £12,000 to £15,000 a year, the notional assumed income that derives from this will wipe out your eligibility for that pension credit. My noble friend did not refer to the comparison with the basic state pension, an issue that intrigues me on all these commutation issues. I do not think that he picked up the point in his response. It is not easy—we all had wet towels wrapped round our heads when we were trying to work out what this might imply—but if someone defers for five years and takes that deferral as income, it costs them their pension credit. If they defer for five years and take exactly the same sum as a lump sum, it costs them nothing at all; it does not affect their pension credit one iota. They have a disregard for up to £40,000, which is great, but there is an anomaly to be addressed, not only within the basic state pension but in the read-across from the basic state pension to the private sector pensions. My noble friend has not addressed this issue today and we may or may not revisit it, as the case may be. I do not have easy answers for it because I do not want to knock the notion of people coming into retirement with a lump sum that they have earned, but I suggest to my noble friend that his argument on this was not persuasive. However, given the time, I am now in a position to withdraw the amendment. Amendment, by leave, withdrawn.