Pensions Bill

moved Amendment No. 16: 16: After Clause 10, insert the following new Clause— ““Duty in relation to provision of free independent generic advice (1) The Secretary of State shall ensure that every jobholder aged 50 or over who becomes an active member of an automatic enrolment scheme under section 3 is also automatically enrolled to be offered free independent generic financial advice in accordance with subsections (2) and (3). (2) The advice referred to in subsection (1) shall be given, unless the jobholder chooses otherwise, in a face-to-face interview, and shall include integrated advice on the possible effects of pension contributions on the management of personal debt and the loss of means-tested benefits in retirement. (3) The advice referred to in subsection (1) shall be provided by a trained adviser, and shall be made available in the parliamentary constituency where the jobholder has their main place of residence or employment.”” The noble Baroness said: My Lords, we on these Benches make no apology for the amendment being bigger and bolder than our similar amendment tabled in Committee. In the intervening two months since we last discussed the importance of free generic financial advice to be offered before auto-enrolment to those over 50, the landscape has changed, as the noble Lord, Lord Skelmersdale, said. More people are getting into financial difficulties. Housing repossessions are rising daily and jobs are being lost. Not only are some high-profile businesses going under, but all around the country many smaller businesses are in quite a precarious position. Many employees—and of course employers—are worried about their jobs and their futures. It is almost certain that the situation will get worse before it gets better. So there is no point in thinking that what is happening to our economy is just a temporary blip and that in a few months’ time everything will be all right, with all the implications that that has for employees and for this Bill. This means that the offer of free financial advice to vulnerable groups before auto-enrolment in 2012 is even more important. After all, as has already been said today, employees who are auto-enrolled will see a dip in their wage packets just when they least want it. There is general agreement that auto-enrolment is a good thing to overcome the inertia of jobholders about opting into an occupational pension scheme. But that surely means that there is a particular responsibility on the Government to take into account the inertia of those for whom it might not be the right course in their particular circumstances. One of the at-risk groups is quite possibly those in the second half of their working lives who have relatively low-paid jobs and mounting debts. Citizens Advice, which is conducting its own generic financial advice pilot, says that half of its inquirers are aged over 50 and that debt advice is at the top of what people need advice about. Take Ron, aged 55, a carpenter who works for a building company and whose wife lost her job a few months ago. Let us say that it is a couple of months before the start of auto-enrolment in 2012. Rob remortgaged his house a few years ago to pay for an extension in order to accommodate his mother-in-law, who can no longer look after herself. He has cut down on all but the essentials. However, with no second wage coming in, he knows that he cannot afford to lose a single penny of his already precarious weekly wage. He has asked his boss about auto-enrolment, but he said that Ron will have to ask someone else as he does not want to get into trouble by saying the wrong thing. Ron does not do websites and he is dyslexic, so he is not too good with leaflets either. The Minister will say that Ron has only to telephone the Pensions Advisory Service, or other bodies whose numbers will be on the leaflet, but Ron does not really want to discuss his financial affairs over the telephone. What he does want is to be able to talk face to face to someone who will explain his options and make sure that he has understood them. And he certainly cannot afford to pay for professional advice. If Ron is lucky, he might find out that his local CAB can help him. Its Moneyplan service, which is being piloted now, aims to give free generic financial advice and will, I am sure, be able to add auto-enrolment to its competences. One of the advantages of that service is that clients can relatively easily be referred to benefits or debt experts within the bureau. However, if the CAB had to offer advice to every employee who wanted face-to-face discussions before auto-enrolment, it would be completely overwhelmed, unless it had a great many more trained advisers—something that we would very much like to see. I know that the Government are carrying out studies exploring what information should be offered and how. In particular, I understand that the Resolution Foundation is working on protocols to find unanimity on how the information should be framed. That is welcome, as far as it goes, but information is not enough and the amendment states that advice must be offered to people in this age range under the auto-enrolment scheme. When the Minister replies, he will no doubt caution against that prescription being put into the Bill, as he did in Committee. However, our worry is that if nothing is put into the Bill, we will be left with vague promises that some sort of guidance will be available sooner or later. We are looking for a commitment that before auto-enrolment comes in, those aged over 50 will be offered free, comprehensive and face-to-face advice from independent financial advisers who understand the way in which personal debt, savings including pension savings, benefits and tax interact. I understand that the Government fear that the offer of such face-to-face advice may look as though auto-enrolment has risks, but many people will be reassured to know that they can talk through their concerns with an independent adviser and that the advice is being offered simply because auto-enrolment is new. After all, in Committee, the Minister said: "““Of course there will be people for whom it will not pay to save””.—[Official Report, 17/6/08; col. 955.]" We expect that people who have no occupational pension plan will be happy with auto-enrolment in the vast majority of cases. However, if it is not the right course of action for even several thousand people, then the Government cannot be accused of pensions mis-selling if advice has been offered in the way that the amendment suggests. I beg to move.