Saving

Oral Answers to Questions — Work and Pensions – in the House of Commons at 2:30 pm on 16 March 2009.

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Photo of Richard Benyon Richard Benyon Shadow Minister (Environment, Food and Rural Affairs) 2:30, 16 March 2009

What steps he is taking to encourage saving through pension schemes.

Photo of Rosie Winterton Rosie Winterton Minister of State (Regional Affairs) (Yorkshire and the Humber), Minister of State (Department for Work and Pensions) (Pensions Reform) and Minister (Yorkshire and the Humber)

We have already taken steps to strengthen and protect the private pensions system to ensure that people can continue to have confidence to save for their future. In addition, under our pension reforms, employers will automatically enrol an estimated 9 million to 11 million eligible workers into a workplace pension from 2012.

Photo of Richard Benyon Richard Benyon Shadow Minister (Environment, Food and Rural Affairs)

Actuaries calculate that changes announced by the Prime Minister in his first Budget as Chancellor in 1997 have cost pension funds £100 billion, which is equivalent to £4,800 for every person with a pension, and there are also the deductions from pension credit payments that were discussed earlier. Is it any wonder that the savings index is as low as it is? It is historically low. Does the Minister agree that we have to get people saving again if we are to help get this country out of recession?

Photo of Rosie Winterton Rosie Winterton Minister of State (Regional Affairs) (Yorkshire and the Humber), Minister of State (Department for Work and Pensions) (Pensions Reform) and Minister (Yorkshire and the Humber)

Yes, it is important that people save. Pensions in particular are one of the best ways of saving for security in retirement. However, under this Government, we have a Pension Protection Fund that provides a safety net for 12 million members of defined benefit pension schemes. We have the financial assistance scheme and the pensions regulator, which reduces the risk of problems arising in pension funds in the first place. None of that existed under the previous Conservative Government.