Pension reform has been a cornerstone achievement of this Government. We’ve seen the introduction of a new single-tier state pension which will guarantee everyone will receive at least £144 per week if they retire in 2016 or afterwards. This Government is also introducing reforms to the private sector pension system that provides flexibility for people in their pensions – without making the system too complicated, and ensuring that people get the right value for money from their pension pots.
Throughout November I have served on the committee stages of both the Pension Schemes Bill and the Taxation of Pensions Bill. You can read more about these Bills and my contributions to them by clicking on the corresponding links.
I am proud to have served on both Bill committees, since both pieces of legislation have the potential to revolutionise the pensions market, giving my constituents more choice and more flexibility in their retirement.
On Wednesday 29th October, I spoke in the Second Reading of the Taxation of Pensions Bill debate. As part of the 2014 Budget, the Government announced proposals to allow people aged 55 and above, from April 2015, access to their money purchase pension savings as they wish during retirement. This Bill is part of a series of measures the Government have undertaken to improve the UK pensions market to provide far more choice for the consumer.
This Bill would introduce new provisions that will allow people to use their pensions like a bank account – people will be free to access their money as they choose, and will no longer be forced by law to buy particular products. I think it is important that we introduce these freedoms that will make the pensions market fairer for the individual, tackle mis-selling and in turn help people to find the best product to suit their needs.
As I see it, if people have chosen to save money for their retirement, they should be able to choose how and when they spend it. Obviously, there may be people that this freedom would not be right for so we need to find a way of guiding people through such decisions. To support the changes we are making to the pensions market, the Government is committed to making provision for this through the guidance guarantee. I have tabled amendments to the Pension Schemes Bill to try to strengthen how that guidance will do this.
I support the provisions included in this Bill, as I believe it will introduce much needed flexibility into this market; giving people the chance to have the retirement that they want without being mis-sold a product or forced to buy a product that does not suit their needs. I believe this Bill will make provision for the consumer to use their pension pot as a bank account and spend their hard-saved money as they want. Alongside the guidance guarantee, I think we can create a pensions market that serves the needs of the consumer.