Clause 1 - Amendment of the Income and Corporation Taxes Act 1988
Pension Annuities (Amendment) Bill
10:30 am
Ms Ruth Kelly (Economic Secretary, HM Treasury; Bolton West, Labour)
I would not say that the Americans are considering rewriting their 401K schemes: I have no precise knowledge of the internal debates that took place in the United States on that score. However, in the US, people are very restricted in their other savings vehicles. In the UK, we have the benefit of individual savings accounts, introduced by this Government, that are designed to encourage low-paid people and even non-taxpayers to save for the short or the long term. People here have a great deal of flexibility over how they use those funds, but I believe that there is no similar savings vehicle in the USA. Greater flexibility in the use of the 401K pension scheme is essential if people in the US are to provide for themselves.