Clause 19
Pensions Bill
12:15 pm
James Purnell (Minister of State (Pensions Reform), Department for Work and Pensions; Stalybridge and Hyde, Labour)
The RIA states that at the £3,000 cap the medium earner would get a 67 per cent. benchmark replacement rate about 75 per cent. of the time. At £5,000 it would be closer to certain that a medium earner could achieve the 67 per cent. replacement rate. Those are some numbers, although not necessarily the calculation that the hon. Gentleman asked for. If I can provide him with information that is not on page 113 of the RIA, which I am sure he has read, I will happily do so rather than risk another Dan Quayle moment by trying to calculate rates of return in my head.
To summarise the matter of the £5,000 or £3,000 cap, I hope that I have explained the genesis of our suggestion. It was about taking on board the important point that people made to us—that the automatic enrolment level of contributions was just a minimum and that we should consider encouraging people to contribute above it. Given that there were to be no transfers in or out, that led to an argument for a higher cap than was suggested by the Turner commission. Concerns have been raised and we are happy to consider them as part of the White Paper consultation process.