Pensions Bill

I, too, have sympathy with the noble Baroness’s amendment, which would move the pensions savings regime in this country a little closer to the flexible model that we would like to see. Giving pensioners more control over their retirement would add an incentive for them to save more over their lifetime and would benefit many as the concept of working life becomes less clearly defined, especially as one approaches retirement age, whenever that is. The Committee may remember that the Minister answered a Question on that subject on Monday. The Pensions Act 2004 allows anyone over state pension age to continue paying national insurance contributions up to the age of 70 and thereafter to commute this extra sum into a lump sum as an alternative to an increased weekly pension. I am sure that the noble Baroness remembers discussing that. Therefore, for the noble Lord to say, as he did at Question Time on Monday, that the Government encourage people to work beyond 70 is somewhat erroneous. Be that as it may, the interesting thing about commuting a full five years of the end-of-life state pension is that it amounts to about £25,000. I wonder whether that is why £25,000 is mentioned in the noble Baroness’s amendment. We have discussed numerous times the impact of a more fragmented working life on people’s pension pots. The inconvenience and unnecessary administration costs of multiple small pots rather than fewer large pots are, I am sure, fully appreciated by the Government. If they are not, they jolly well ought to be. The changes over the past few years to increase the portability of small pensions were very welcome and I see the possibility of raising the commutation limit in much the same spirit. However, I would have preferred it if the noble Baroness and the noble Lord had not mentioned hairdressers’ small pots in connection with £25,000; I think that they would rarely have such a large pot.