Pensions Bill

I wish to speak briefly to the four amendments in this group in the names of my noble friends. For the reasons set out by the noble Baroness, Lady Hollis, we have to recognise that the annuity rules are a major disincentive to people accumulating savings in a pension plan. Like her, I think that the best solution would be to move away entirely from this stricture towards a much more flexible lifetime savings account, and sooner or later we shall get there. However, I recognise that we are dealing with a Pensions Bill this afternoon, and it seems to me that dealing with annuities in this way is a sensible first step. Reading these amendments, I anticipated thatthe kind of objection made by the noble Lord,Lord Oakeshott, about the complexity of these arrangements, would be raised. Therefore, it would be useful, if the Government are bringing up the argument about complexity, to know whether that is the sole reason for their objection or whether they would be open to dialogue on whether different arrangements could be made. For example, the noble Lord, Lord Turner, suggested that people should be required to buy a fixed annuity and then be free to spend the rest of the capital; alternatively, if the Government do not want to introduce those conditions, they could specify a minimum level of capital that had to be kept within the scheme at certain ages. There are lots of ways that those measures could be simplified to achieve the same end of ensuring that people do not fall back on benefits while dealing with the tax issue on other funds that are taken out. It is important that we know whether the Government are against annuitisation relief in principle or whether it is simply a question of finding a practical way round it. I cannot sit down without making the further point that another aspect of the disincentive of annuities is the inability to pass savings in pension pots on to the next generation. If money is saved in a pension pot, surely others who will need a pension pot later could also benefit from it. Do the Government accept that it is beneficial to take money left in a pension fund at the end of a life and pass it into a pension fund of the next generation without tax being taken from it? I recognise that I am extending the argument slightly.