Pensions Bill

My Lords, I thank all noble Lords who have participated in the debate and particularly the noble Baroness, Lady Thomas, for moving the amendment on a subject of shared concern—it is certainly a concern for the Government. She referred to the economic backdrop, as did other noble Lords, and clearly these are challenging times for our economy. Our priority as a Government is to guide the country through them on a basis that is focused on being fair. Of course, the thrust of our pensions legislation is to look at the long term. Let me start by giving one or two statistics because issues around practicalities and capacity were very much on the minds of some noble Lords. We have referred to 9 million to 11 million people being auto-enrolled; around 2 million of those will be over 50 years old, with 3 million under 50 and in debt. Much of the discussion was around personal debt and the impact of that on people’s decisions. Clearly people with high levels of high cost debt may well be better advised to opt out, but to focus on the over-50s is, in a sense, the wrong way round from a debt point of view because the data that we have from the British Household Panel Survey 2005 show, basically, that the over-50s are less in debt than other people. In a sense, that is not surprising. Fifty per cent of all auto-enrolled individuals are expected to have some personal debt but that figure drops to only 35 per cent for the over-50s. So, for that reason if no other, focusing on the over-50s does not seem the best possible targeting. Although I share the concerns of the noble Lord and noble Baroness, the amendment implies that the Government need to be forced to provide information to those being auto-enrolled. That is simply not the case. We are actively considering how to ensure that everyone who is auto-enrolled can find the information they need quickly and easily. It is, after all, in our interests to do so. Those who have questions and cannot get an answer that reassures them may well decide that the safest option is to opt out. That puts our reforms at risk, so we have common cause on this issue. I assure the noble Baroness that we share the same vision: a clear, simple route for every individual to the information they need in a format they find convenient. To do that, we expect to make available a simple set of contact points in different formats—web, phone and so on—and to link the services together so that people can find their way through them easily. We want to build on existing services, including those that offer face-to-face help, using their expertise and experience. I know that the noble Baroness shares my high regard for those who are already involved in this field. CAB and TPAS, which have already been mentioned, have strong records in this regard. But those services will need to be added to, adapted and linked to create the unified offering we all want. The development of the money guidance service proposed by Otto Thoresen will make the task considerably simpler. If there is a distance between us, it is in the assumption which underlies the amendment that face-to-face provision is the best approach. In effect, the amendment would mean that individuals were enrolled into face-to-face advice unless they actively opted out. It is not self-evident that most people will find face-to-face sessions the most convenient and helpful. For many people who are used to using the internet or phone services, being able to get the information they need in their own living room or even at their desk will be far preferable to finding the time to visit an adviser. Otto Thoresen, in his review of money guidance, concluded that face-to-face provision should represent no more than a minor part of the package. Indeed, the New Zealand pension reforms have succeeded without any offer of free face-to-face advice.