Automatic Pension Transfers

Oral Answers to Questions — Work and Pensions – in the House of Commons at 2:30 pm on 24th February 2014.

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Photo of Andrea Leadsom Andrea Leadsom Conservative, South Northamptonshire 2:30 pm, 24th February 2014

What progress he has made on implementation of the pot-follows-member model of automatic pension transfers.

Photo of Steve Webb Steve Webb The Minister of State, Department for Work and Pensions

I can announce that we have been working closely with Her Majesty’s Revenue and Customs to examine the feasibility of using the pay-as-you-earn data and system to deliver a secure, efficient and straightforward pot-matching element to the pot-follows-member system. A pot-follows-member system leads to more efficiency, potentially better member engagement, greater consolidation and better outcomes in retirement.

Photo of Andrea Leadsom Andrea Leadsom Conservative, South Northamptonshire

I am grateful to my hon. Friend for his answer, but as we are all living longer, which is great news, it is an ever greater priority to ensure that people save for their retirement. Is he looking at options such as the auto-enrolment system in place in Australia? Will he also consider a savings and retirement account for future pensioners?

Photo of Steve Webb Steve Webb The Minister of State, Department for Work and Pensions

My hon. Friend will know that our auto-enrolment programme, which we are in the middle of rolling out, has been highly successful, with nine out of 10 people choosing to stay in that programme. The Australian version is compulsory; that is something that we have chosen not to do in this country. The fact that most people are choosing voluntarily to stay in pensions saving is a judgment that we have made the right choice. I should add that the Australians have said that they wish that they had introduced from the beginning the pot-follows-member system that we are introducing.

Photo of David Mowat David Mowat Conservative, Warrington South

The pensions Minister is consulting on a charges cap. For the avoidance of doubt, will he confirm to the House that he still plans to introduce the cap during the lifetime of this Parliament?

Photo of Steve Webb Steve Webb The Minister of State, Department for Work and Pensions

I refer my hon. Friend to the written statement that we issued today, which confirms precisely that we will shortly bring forth our announcement, and that we will see through our agenda during the course of this Parliament.