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I have just a couple of observations on the retirement income fund. It is another interesting idea and another reason for my welcoming our debate on the Bill, which is drawing, as the right hon. and learned Member for Kensington and Chelsea said, on Canadian experience. However, a concern that I raised on Second Reading was the danger that people would run out of money late in their lives. In the debate I drew attention to the advice issued by the Canadian Bankers Association:
“If you take out too much, too soon, you may outlive your RIF and may be short of funds.”
The prospect of that happening to someone in their mid-90s with no dependants is very alarming, and we should create safeguards against it.
I think that the right hon. Gentleman suggested on Second Reading that the risk would be theoretical, but that is not so. In Canada, it is a significant risk. I have had the opportunity, since Second Reading, to read the interesting paper by Professor Milevsky of the Fields institute in Toronto, called “How to Completely Avoid Outliving Your Money”. He goes into the issue at some length and concludes that what we need are annuities. There are real difficulties about the idea, which require further thought, beyond the provisions in the Bill.
I should also point out that quite a few changes are being introduced, such as the change to the trivial commutation limit; the change in the rules on income withdrawal from A-day; the innovations of limited period annuities and value-protected annuities whose attractions Professor Milevsky particularly celebrates; and, alternatively, secured pensions, which the hon. Member for Eastbourne mentioned. The right hon. Gentleman’s idea is interesting, but involves some serious difficulties that require further thought.