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Saving

Volume 489: debated on Monday 16 March 2009

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.

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?

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.