It is a pleasure to speak under your chairmanship, Mr Hosie. I thank my hon. Friend the Member for Delyn (Rob Roberts) for securing this important debate and it is a pleasure to follow the hon. Member for Luton North (Sarah Owen).
This is an important debate on a subject that should be talked about more by more of us. My hon. Friend mentioned the number of people who do talk about pensions. We could have done with seeing a few more people here today representing their constituents to discuss the future pensions policy of this country, which is incredibly important. I am sure my hon. Friend will thank all hon. Members here for participating; it is testimony to those who really care about the issue that they are here today.
The matter affects the lives of millions of people in our country. It is very complex and complicated for people to navigate. My Southport constituency has an incredibly high level of pensioners. We not only have a high number of our own but people come to retire to our beautiful seaside resort, so I quite often talk about pensions with people there.
I will discuss a few issues on pensions policy. A number of points have already been made but I want to reiterate some of them in my speech. I will first say that the introduction of the Pension Schemes Bill was welcome. It contains meaningful and impactful measures that will go a long way to address the challenges faced by pensioners. We know, for example, that people might hold at least 11 different jobs during their working lives and will have paid into a multitude of different pension pots.
Someone is more likely to have 25 different name badges from companies than a gold watch after 25 years of service.
Most people will only realise when they reach that stage in life of coming up to retirement that those pension pots are theirs and are available, and they need to know how best to utilise them. That point is often too late. People might not realise that sometimes it is possible to take out funds, that the funds might not have been invested in the right way or might have been invested in a way that that person did not want. Information from pension providers, not just the annual update but more regular ones, is really important. Employers should also talk about pensions on payslips, whether they are physical or virtual, asking whether someone is getting the right pensions advice. That could be done every month for those who are paid monthly or every week for those paid weekly. There should be something there specifically talking about pensions, so that people are informed and reminded every step of the way, because people are obviously very busy.
The pensions dashboard is welcome. It will simplify pension information and bring it to one place. It will empower people to do more than they have previously been able to do, with pieces of paper given on an intermittent basis.
Another area of the Pension Schemes Bill is green pension investments. The UK is the first major economy to put climate risk and disclosure into statute for pension schemes. I asked the Secretary of State for Work and Pensions about that last week. It is a new area for pensions, but the generations coming up are more inclined to support green issues and might want their pensions to be invested in some of those companies, so we should empower them to do that.
As my hon. Friend the Member for Delyn set out, people should receive a good retirement. The Government have shown through the Bill that they understand the issues facing pensioners; I genuinely believe that they are responding to them. When we talk about pensions, however, we are talking about the end of the process—when people will receive one or what time of life they will retire. We need to start talking about pensions at the beginning of people’s working lives when they start a job or a career and, hopefully, start saving for their retirement. As he said, it may not be the sexiest subject to speak about, but it is one of the most important. If somebody gets it right or wrong at the start of their career, it can be life-changing. Of course, as has been said, we should also look at points in time where we can have an MOT of where our pensions are.
Education in schools is critical and it should be there for all children in all schools. My financial education was about opening a bank account, credit cards, overdrafts and how to fill in a cheque, which was a cause of great excitement for many fellow pupils. I must say that I am still excited about it; I still use cheques. That being said, there should have been, and there should be now, more emphasis on pensions and what that will mean in later life. If we do not start explaining the long-term value of saving for a pension, we will never do it when people get close to the point of receiving one. That is really important. I know that the Minister is committed to lifelong financial education, and there is no better advocate of that than him in the Government, but I would like to see more of that happen when he speaks to my right hon. Friend the Secretary of State for Education.
On pension credit, which has also been brought up, I know that the Government are doing all they can to ensure that people who are eligible for pension credit, who have paid into the system throughout their lives and done the right thing, receive it. Pension credit ensures that the pension of those who receive a weekly income is brought up to the minimum amount, which is an absolute lifeline to many people. As has been said, many people do not claim everything they can. We should encourage people to claim what they are entitled to.
Recent research commissioned by Independent Age shows that we must work harder on that. If the level of pension credit uptake was boosted to 100%, it could lift 450,000 pensioners out of poverty. Whether they are buying groceries or heating their homes, it is important that people in older age are living a life, not just existing, and that they do not feel shut away from society in any way. In 2018-19, £1.8 billion of pension credit was not received by those eligible for it. The low uptake of pension credit costs the taxpayer £4 billion a year in additional unavoidable NHS and social care spending. In an area that we are looking to reform and make better, we could prevent that high level of spending by giving people what they are entitled to.
Renewing our focus on increasing uptake would save the taxpayer money, as I have said, and people in all parts of our country would have a better standard of living. DWP representatives have already confirmed that the technology is there for greater automation of benefit provision and that the data required is largely already held by the Government. Hopefully, we can unlock that to get the process going. We need to build on that and work towards meaningful solutions for those in pension credit scenarios.
The key things that I would like the Minister to take away include education, of course, which is where we can start to build a better pensions policy and framework. If people have better education, they can take control of their lives. In later life, we need to look at the pension credit issue. We should also have an eye on innovation, technology and green industries and ensure that they are promoted to people now, because there is no better time for them to be thinking about it, in terms of their future and the future of our planet.
3.14 pm