Pensions Bill

I have tabled an amendment in this group. We support the principle behind the amendment of the noble Lord, Lord Oakeshott. Information of the nature indicated in the amendment is important and we too are concerned about the impact of means-testing on how personal accounts will develop in practice, and it is extremely important to ensure that the personal account scheme is designed as far as possible to avoid mis-selling, an issue to which I will return in later amendments. My Amendment No. 120 is grouped with Amendment No. 111 because it deals inter alia with financial advice, also covered in the noble Lord’s amendment. Amendment No. 120 seeks to introduce a requirement for the delivery authority to ensure that it supports objectives for the scheme of access to information and financial advice. It is somewhat less ambitious than the Liberal Democrat proposal in relation to advice. I agree fully that there are great dangers of mis-selling involved in personal accounts, but I am not clear what the answer is on how financial advice should be delivered, and more importantly, who is to bear the cost. At Second Reading I said that I was sceptical about generic advice being an adequate solution, and I look forward to seeingthe work being undertaken for the Treasury byMr Thoresen, but I remain to be convinced thatthere is a satisfactory generic advice solution tothis problem, one which relies so much on the circumstances of individuals. I am also concerned to ensure that no public subsidy is made available for advice on personal accounts because that would upset the level playing field with other savings products, which in effect have to bear the cost of advice. I am not sure that we sign up to the free element of the amendment of the noble Lord, Lord Oakeshott, unless he means free to the individual but borne as part of the overall costs of the personal account scheme. I can see that charging individuals would not work, but there would be a problem if we expect to see these costs being borne by the public purse. That would be unfair, but if they are loaded on to the costs of the scheme, what will they do to the overall economic returns available to it? I shall mention briefly the other part of Amendment No. 120. It covers access by both individuals and employees to information on rights and responsibilities under the scheme. It is goingto be hugely complicated for both employers and employees. So far as employers are concerned, those at the smaller end of the business scale, which in numerical terms comprise by far the largest group, will find this very difficult to apply. We must ensure that the scheme is designed so that proper information is available on websites and in written form; that is as important as ensuring that advice is available to those entering the scheme.