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Pension Schemes Bill

Volume 759: debated on Thursday 5 February 2015

Third Reading

My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Pension Schemes Bill, has consented to place her interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.

Schedule 3: Pensions guidance

Amendment 1

Moved by

1: Schedule 3, page 68, line 28, at end insert—

“The Treasury shall ensure that appropriate information is provided and disseminated so that people can make informed choices as to the effect of pensions freedoms and flexibilities on income-related benefits and social care costs.”

My Lords, from April the new pension freedoms at 55 may bring joy to many but, in my view, they are destroying the integrity of DWP benefit rules—and no one seems much to care. I find that a bit shocking. Many thousands of rather vulnerable people will not know where they stand or what they do; neither will their CAB or Pensions Advisory Service advisers. Yet time is running out, hence this amendment asking for guidance.

Clearly, and currently, DWP has sensible rules for those of working age needing means-tested benefits. Income, say from a mini-job, counts against your benefits, as do savings, say in a building society or in ISAs, which are above £6,000. They taper out benefit until at £16,000 of savings your entitlement to any means-tested benefit is abolished. DWP rules also stop you claiming benefit if you have deliberately got rid of your savings, perhaps by gifting them to your son. Any capital that is truly inaccessible, however, and which you cannot give away or spend—for example, your home and, until recently, your pension pot—is rightly ignored.

These sensible rules have been blown apart by the new pension freedoms, which mean that at 55 you will be able to access your pension pot, just like a bank account or an ISA. What then? Given the savings cut-off point of £16,000, having £25,000 in ISAs would stop you getting income-related benefits, so should £25,000 in an equally accessible pension pot also stop you? What is the difference any more between a pension and an ISA, so that pensions are protected from affecting your income-related benefits and ISAs count against them?

Perhaps I may spell out just three issues. The first is income. Let us say that at 56, you have a modest wage of £20,000. You rent privately and get housing benefit as you have minimal savings. You have a small pension pot of £25,000 and, after April, you take £15,000 of that pension pot to pay off debt or buy a new car. Up to 25% of that pot, some £6,000, is obviously tax-free under pension rules but will count as income against your means-tested benefits under DWP rules. Above that £6,000, you will pay income tax as well as lose benefit on the rest of the £15,000. It is essential that anyone on means-tested benefits at 56 knows what the hit will be for accessing their pension pot. It will cost them—and most, I suspect, would not even begin to know how much. They will need a plain English leaflet from CAB offices, welfare rights offices, the local library or charities, for example.

So far, so sort-of simple—but then we come to a more difficult issue, which is that of capital. What happens if, instead of accessing your pension pot to count as income, it simply sits there as capital, fully accessible when you need it but not yet taken, just like an untouched ISA? Up until now, inaccessible pension pots have been ignored—quite sensibly, they do not count against DWP savings rules—whereas other accessible income and savings such as ISAs do. That is sensible as it stops people having, say, £100,000 in building society accounts or ISAs and still getting means-tested benefits, paid for by the taxpayer. That is right, but now the rules of DWP on capital and the new provisions of the Treasury on pensions collide. It is a real mess.

Pensions and ISAs will from April, at age 55, become interchangeable. Pensions need no longer be for retirement; they have, like ISAs, become a savings pot. Both are similarly tax privileged, both are equally accessible and both—or neither—may be fully spent before retirement. There is no difference any more. Yet apparently ISAs will still count against means-tested benefits, while pension pots, though identical to ISAs, will not. Is this fair? No, because if you can access your savings in whatever form they take, you should be expected to do so rather than add to the taxpayer’s benefit bill. If you treat them differently, though, as the Government have arbitrarily and illogically decided, people can game the system.

Let us say that you are earning £25,000 a year, with £25,000 in ISAs and £25,000 in your pension pot. You have injured your back and need to stop work soon, and would want means-tested benefits—but your £25,000 of ISAs debar you. What do you do? It is a no-brainer: you cycle your ISAs into your pension pot and shelter them. When next year you retire at 56, you will get full means-tested benefits and potentially the same access to your savings that you had when half of them were ISAs. Great for that individual, but for the rest of us it means bigger benefit bills to be footed by the taxpayer—and no doubt youngsters of 20 will be blamed for the increase in the bills.

Worse, spending your ISAs on, say, helping your son with his university fees could count as deliberately depriving yourself of capital. Therefore, to check such cheating, you are treated as though you still possess that money, as you cannot give it away and still get means-tested benefits. So will sheltering your ISAs or indeed any savings in your fully accessible pension pot be regarded as deprivation of capital—in other words, cheating? How can the DWP track that? How can people understand all or any of this?

The third issue, and in many cases the most unfair and unpleasant, is social care. Social care at retirement, as noble Lords will know, is means-tested. At normal retirement age your pension pot, even if you have not touched it, is treated as though it was giving you a notional annuity income. This notional income is included when assessing what you pay for social care. Pension pots are not sheltered; okay, but if you are 55 and have built up a modest pension pot at work and now, alas, have broken your back and need social care, even though your pension pot is fully accessible, as if you were 65, your pension is not taken into account for social care means testing. Get injured at 55 and you pay little or nothing for your social care. Live on—as we hope—a few years longer, and your pension is taken into account and your social care bills soar. How is this fair? I reckon that it is age discrimination. How can we expect people to understand such perverse rules? I see judicial review ahead; this is a shambles.

We raised some of these issues three weeks ago in Committee. We pressed on Report and exchanged several emails, and finally we had a meeting two days ago with the Minister and staff which, although late in the day, we appreciated as it was helpful. However, problems and issues of clarity remain, and the rules are still fundamentally incoherent and inconsistent. In a few weeks’ time people, some of whom are on means-tested benefits but perhaps have a modest pension pot, are going to come into CABs, libraries or charities wanting to know how this affects them, and advisers will need and indeed want to help them do so.

Hence this completely anodyne amendment, whose mild language disguises, frankly, my very real anger at the mess we are in. There is no way that the new pension freedoms can be made consistent with DWP rules in ways that are fair, now that pensions and ISAs are interchangeable. The DWP is having to tear up its rules on capital because HMT has torn up its rules on pensions. So the DWP has simply decided to be arbitrary about it, and the rules become whatever it says they are, with no coherence, consistency or predictability. Policy is being made on the run. This is no way to run a business, let alone a bureaucracy that seeks to be transparent and clear. The DWP is having to pretend that pension rules have not changed, because it is too awkward to handle the consequences. The inconvenient truth is that nobody thought or, I fear, cared a toss about what would happen to DWP clients with a modest pension fund while those with major funds went about toasting themselves with champagne.

We are asking the Minister today for undertakings, and further meetings if necessary, to tease out the remaining issues and to discuss the content of a mass-produced, widely available leaflet for CAB and so on, which explains—it cannot, actually explain, but it could at least try to describe—these conflicting and unfair rules.

This is a mess, and I am deeply dismayed by it. This amendment may be the best we can do for the moment. I beg to move.

My Lords, I should first declare that I am the unremunerated president of the Society of Later Life Advisers, which provides independent advice to older people. I am sorry that I have not taken part in the proceedings on this Bill so far, knowing, as I have, that it is so safe in the eloquent hands of my noble friend Lady Hollis, but I want to intervene in this case to draw to the House’s attention one particular, very dramatic effect of what is happening.

Let us imagine two people, A and B. They both have £40,000 in their pension pot, and they both retire on the same day. One buys an annuity, the other takes the money as a lump sum. A few weeks later, by coincidence, they both have to go into a care home. As they go into the care home, they both say, “I don’t want to sell my home which I am leaving to go into this care home. I might get out one day. Please don’t make me sell”. To person A, the following applies: the council, under the Government’s deferred payment scheme, has to give them a loan to cover the cost of their care, which is repaid when they die, so they do not have to sell their home. However, person B, because they have £40,000 in their pocket, exceeds the £23,250 limit—the arbitrary limit which I have drawn attention to on a number of occasions—on non-housing assets that they are allowed to have to take advantage of the deferred payment scheme, so they instantly have to go off to sell their home.

The Government promised that nobody would have to sell their home to pay for care. That transposed gradually into a universal guarantee and was then narrowed down still further so that nearly half the people eligible for it were disqualified—but now we find arbitrariness added to arbitrariness because so much will depend on whether you chose to take a lump sum or an annuity. This is beyond rectifying now, alas, as the secondary legislation has gone through, but one thing we can do is to make sure that before somebody decides to take a lump sum, they know that they will in future not be eligible for the deferred payment scheme. That requires authoritative advice. Is that really too much to ask?

My Lords, surely there must have been discussions since the Bill had its First Reading between those in the pension business and those who act as financial advisers to people. Frankly, most people do not understand anything about pensions, and I think we have to accept that. Maybe people here do, but most people do not. You go to a financial adviser, who explains. I say, “Oh, take away all that small print. I can’t be bothered to read it”. That is the first thing, and that is a sin that I have committed several times.

The second is that you do not understand the way it is written. The noble Baroness, Lady Hollis, made a point about plain English. I think that should be made on every single Bill that we pass in this House, because it is so convoluted and it is just hopeless. People deliberately make things complicated so that they can hide behind them, but that is not the Government’s fault; it is ours for not insisting that we have much easier ways of looking at these things and for not making people like me, instead of throwing it into the waste-paper basket, take some responsibility for my decision, which I have not made on the basis of proper information.

My other point is that there are always ongoing conversations whenever a Bill is produced and goes through its normal passage in this House. In between the various stages—Report et cetera—we have meetings. Ministers say, “We want to see you. We’ll call for you”, and we can ask for meetings. Is that breaking down? Do we have too much legislation, so that we do not have time to do it or are too involved in committees in the House? What is going wrong? Is it partly our fault? We are supposed to scrutinise these Bills and we are not doing it properly if these sorts of problems, which have been so graphically explained by the noble Baroness, are occurring. We have to do something about it, and the responsibility is ours.

I will support very briefly what my noble friend Lady Hollis said in her introduction of this admirable amendment. We have discussed this during the progress of the Bill through this House, and have made the point on a number of sides that it is necessary that people should be fully informed of what they are doing. It is up to the Government to make sure that those arrangements are available for people to become properly informed of what they are doing. It has to be understood, of course, that people are making decisions about their future and what may happen if they make the wrong decision. It is very necessary that the appropriate choices are made by the people who are facing these alternatives. I therefore hope that this admirable amendment receives the full support of this House.

My Lords, I will be brief, because the issues presented by this amendment have been brilliantly articulated by my noble friend Lady Hollis.

Throughout the passage of the Bill we have sought to ensure that consumers’ interests are fully protected, particularly in respect of the guidance that they will receive from the citizens advice bureau or TPAS. But the accuracy of the information for them is wholly dependent on the clarity of government policy. We are concerned that the treatment of pension funds in respect of income-related benefits and social care do not meet this test of clarity. Such clarity is particularly essential here, because the decisions that people make will have a dramatic impact on their future lives. I hope that the Minister in response will be able to give the House the assurances that we are seeking through this amendment so that there is no confusion in the public’s mind and no inconsistency across the country in the guidance that will be given on this incredibly important issue.

I thank the Minister for his letter dated 4 February, which lays out the Government’s position on how they will deal with some of these matters. But I—and, I am sure, my noble friends—remain concerned that, as they say, “the devil is in the detail”, and we have already heard this morning of cases where there has to be clarity and consistency of treatment of individuals in this respect. Clearly, we will continue to look closely at the regulations that follow and the guidance issued in association with them, to ensure that the public understand the implications of the decisions they take in respect of any entitlement to income-related benefits or social care costs.

My Lords, I begin by thanking the noble Baroness for her amendment, which obviously addresses an extremely important issue.

This amendment seeks to place a separate and additional duty on the Treasury to provide appropriate information on the effect of pension freedoms and flexibilities on income-related benefits and social care costs. I agree that it is vital that people understand how benefits and social care entitlements interact with the new pensions flexibility and that consumers need to be aware of the impact of accessing their pension pot on their eligibility for income-related benefits and help with social care costs.

The Treasury is working to ensure that the content of the Pension Wise service includes information about entitlement and deprivation rules so that consumers are aware of these when choosing whether to access their pension savings. We are also working to ensure that people are aware of the need to plan for later life, including the risk of needing care and support and what that might mean for their choices. This will help people think about how they wish to live the rest of their lives. In response to the noble Lord, Lord Lipsey, the Care Act provides that no one is required to sell their home to pay for care. The difference in this case is that the lump sum is income in the year taken, and we agree that this will need to be covered in guidance, both on pension pots and on social care, which we will provide.

The DWP will issue clear guidance on the treatment of pension pots in income-related benefits in advance of April. This is to help people make informed decisions about accessing their pension pot. We plan to do this, as requested by the noble Baroness, by producing a leaflet which we will both print in hard copy and place online on GOV.UK. Other websites will be able to link to this information, and there will definitely be such a link from the GOV.UK Pension Wise website, which will direct those who are affected by this issue to the DWP information. Pension Wise will be a key way of equipping people with this information online on GOV.UK, on the phone through the Pensions Advisory Service, and face to face through citizens advice bureaux across the country. Alongside the new content being developed for Pension Wise, the new guidelines will also be reflected in the training programme for guidance specialists from the Pensions Advisory Service and Citizens Advice.

As the noble Baroness said, she met my noble friend Lord Bourne and me earlier this week to discuss the substantive policy issue—namely, the interaction of pension flexibilities with the benefits and social care means tests. The principal query that the noble Baroness raised is whether the distinction we make between ISAs and other savings vehicles, as opposed to pension pots, in benefits means testing remains fair after the introduction of the new flexibilities. ISAs are taken fully into account in income-related benefits, whereas we ignore untouched pension pots until someone reaches pension credit qualifying age. The noble Baroness argues that this is an arbitrary distinction now that the tax treatment of the two products is more aligned.

The Government, however, firmly believe that the difference is an important one. ISAs are for use at any time, but we specifically encourage people to save into pensions to provide for themselves in later life. We would not want to design our benefit system in such a way as to encourage people to spend their retirement savings when they are still below pension credit qualifying age. Aligning the treatment of ISAs with that of pension pots in the means test would be expensive for the taxpayer, as people with resources could secure more benefit. On the other hand, aligning the treatment of pension pots with that of ISAs would mean that claimants could lose benefits and so may deplete their pension savings before reaching their retirement. Neither outcome is desirable, and we therefore believe that the current position remains the right one.

This gives rise to a second question that concerns the noble Baroness, which is whether this situation gives individuals the opportunity to move their ISAs, which would be taken into account, into their pension pots, which would not be taken into account until pension credit qualifying age. The Government have considered the matter seriously and, in the light of our analysis, we do not feel that we need to act on this matter presently. The numbers of income-related benefits claimants with substantial ISAs is relatively modest and, should people move their savings to their pension pot, the additional upfront welfare costs to the Exchequer are partly offset by welfare savings in later life as those individuals would rely less on income-related benefits as a pensioner. On this issue, we plan to monitor behaviour after April when the new pension flexibilities are introduced, and respond proportionately if we need to.

I should add that people deliberately depriving themselves of money in order to secure or increase benefit entitlement may be subject to rules on deprivation of assets that already exist in both the benefit and social care systems.

Is the Minister saying—he may go on to say this in the next sentence—that if you cycle your ISAs into your pensions, that would be deprivation of capital?

No, I do not think I am saying that. I will make sure that I am not and correct myself if I am wrong. All I am saying is that the deprivation of assets rules which currently apply will continue to apply in respect of money taken out of ISAs.

That was my question. Can the Minister explain to me why, if money is taken out of ISAs and goes into pensions, that is not deprivation of assets?

It is not the point at which money goes from ISAs into pensions that is a deprivation of assets. Deprivation of assets may occur if and when money is taken out of one or both of those pots.

I have listened with care to my noble friend, and although I have not participated in the debate, I understand the issue. Surely by moving an ISA into a pension pot, the individual then does not have access to buy, sell or add to the ISA. It is just not available; it is now hidden in the pension pot. Therefore, the individual deprives himself or herself of the choice they had when they had the ISA. It is fairly simple: is it or is it not something that could be penalised? People need to know this. If we are not careful, there will be chaos in this country later in the year as regards people with small pensions and small ISA pots.

My Lords, I thought I had just said that if you move money from your ISA into your pension pot that does not qualify to be treated as a deprivation of assets. You are not taking that asset as income and you are not spending it; you are moving it from one pot to another.

So if you have more than £16,000 in a building society, which stops you getting means-tested benefits, and you take that money out of your building society account and put it into a pension pot, is that deprivation of assets?

My Lords, that is an extremely interesting question to which I do not have the answer. However, it has absolutely nothing to do with the amendment before the House, which is to do with whether the Government will give adequate guidance on the issue. The amendment is not about the detailed substance of the rules which are being dealt with not least via a series of discussions with the noble Baroness, as she said. Those discussions will continue. I will happily write to her and other noble Lords about these detailed issues but I stress that the purpose of the guidance—the point of this amendment—is to ensure that the guidance correctly reflects policy. That is what we have committed to do. We have explained how we are going to do it. We have met the noble Baroness’s perfectly sensible idea that we produce a specific leaflet to do it, and we will do that by the beginning of April.

As I explained, we have already had a number of discussions with the noble Baroness and have agreed to meet her after today and before the start of the Recess to continue our discussion on these important matters. I know that she is still unhappy about what the Government are doing with regard to the substance and some of the details of this issue. As I say, we are committed to making sure that we have the maximum degree of clarity. We are committed to having further negotiations with the noble Baroness to tease out—

My Lords, if the Minister is assuring us that there will be information online and people will be able to understand everything, why cannot this amendment be put on the statute book so that there is a duty on the Treasury to inform people about this issue? For me the provision is so simply worded that I do not understand why it cannot be on the statute book.

My Lords, we are not suggesting that this goes on the statute book because this requirement already exists. The FCA rules on the guidance providers already require guidance to be given in respect of benefits. All we are doing now is fleshing out how we intend those existing rules—which are in the FCA rulebook, or the FCA document which has gone to the organisations providing guidance—will work in respect of benefits and social care.

Could the Minister explain in a clear way that a simple mind like mine would understand whether you are depriving yourself of assets when you take money out of an ISA and put it in a pension fund? How can I be confident that the guidance, which will come from somewhere else, will be more erudite than what I am hearing at the moment? I for one want to say, in this week when we have seen great difficulties in social care provision and when most people are worried about their social care and their pensions, that it seems that this particular bit of legislation actually puts a duty on the Treasury to ensure that it is the one that informs people of this.

My Lords, for the third time, if you move money from your ISA to your pension pot, that is not a deprivation of asset. The Treasury is in charge of the guidance process.

The noble Baroness has an aversion to the Treasury—I cannot imagine why—but the Treasury has this power to provide the guidance under the Bill. The Treasury and the FCA have set out the details of what the guidance has to contain. It is already written into the FCA rulebook that it has to cover benefits. Therefore, the Government’s contention is that there is no need for a second amendment requiring this to be in the Bill when not only will it happen, but the rules saying that the guidance providers must do it are already in existence.

My Lords, I am grateful to all of those who have taken part. It was really helpful to try to tease out some of the very serious issues. They are serious. All of us are concerned about a rising benefit bill, particularly where there are cuts across other objectives such as the health service, education and whatever. We also want to support those services.

These proposals were imposed on the DWP. My sympathies are entirely with the DWP, which is trying to sort out the mess created by an open-handed gesture from the Chancellor of the Exchequer, which has not been thought through for its implications for means-tested benefits. That is the problem which is apparent today, from everything that we have heard. We still do not know half the answers. I am quite sure that the DWP and DWP Ministers are doing their honourable and decent best to try to make some sense out of a tangle and mess that has been dumped on them by HMT. I am not blaming any Minister personally, but that is what has happened. HMT’s pension freedoms absolutely tear up the rulebook, particularly on DWP capital, which is there to protect all of us in terms of benefit expenditure. It is only after yesterday evening that we are beginning to get some detailed information. We have been pressing for this for five weeks in this House, let alone down at the other end.

I am grateful to my noble friend Lord Lipsey, who teased out further problems with the interaction between social care and pensions. I look forward to the letter that he so rightly asked for being in the Library.

The noble Baroness, Lady O’Cathain, absolutely rightly emphasised the need for clarity. She is so right, but how can you have clarity when you have not fully sorted the policy problems behind what you are trying to explain to people? That is why we have come back with a very anodyne amendment, but behind it is the charge that the policy has not been fully sorted. I therefore hope that the actor writing that pamphlet will ensure that the policy is sorted.

I am not saying that the noble Lord, Lord Newby, gave the game away, as that sounds too frivolous, but he made the point that you cannot align ISAs with pensions, because that does not work, and you cannot align pensions with ISAs, because that does not work for people over the age of 50. So he is stuck and we are all stuck because, as far as I can tell, nobody at HM Treasury took on board the very real skills and experience of the people at the DWP who have to operate the service in practice. Talk about silo government—although we are all guilty of that; I am not saying that we are whiter than white when obviously we are not. However, here is something that will affect hundreds of thousands of people, and the two departments have not got their act together. The DWP is trying to make rules which are not rules but simply arbitrary decisions, and I am confident that at least some of them will be tested by judicial review over the years.

This is a mess but I hope that this amendment, which I will of course withdraw given the undertakings that the Minister has given today, will at least send a signal, as the most reverend Primate said, and give us the chance to get the policy clear so that the leaflets can be clear. Frankly, in order for that to happen the DWP at the highest level has to talk to the Treasury at the highest level and come up with something which is decent, fair, transparent, consistent and simple, if it can. I beg leave to withdraw the amendment.

Amendment 1 withdrawn.

Schedule 4: Rights to transfer benefits

Amendment 2

Moved by

2: Schedule 4, page 100, line 8, leave out from “period” to end of line 11 and insert “required by section 91(1A) or (6A).

(1A) A member of a pension scheme loses the right to take a cash equivalent in accordance with this Chapter if, after the member makes an application under section 91, the duty of the trustees or managers to do what is needed to carry out what the member requires is extinguished by section 95(2A).

(1B) Nothing in subsection (1) or (1A) prevents the member from later acquiring a new right to take a cash equivalent in relation to the same benefits.”

My Lords, I apologise that this amendment may not be quite as highly charged as the previous one. It corrects an oversight in relation to the amendments that we made to the transfer provisions on Report and simply inserts the provision relating to when a member’s transfer rights fall away into Northern Ireland legislation.

The amendment makes a consequential amendment to the existing transfer legislation, which sets out when a member’s rights to a transfer fall away. It puts beyond doubt that the right to a transfer value falls away after either three months or any extension period granted by the legislation. This amendment and the one applying to the legislation relating to Great Britain have been made in response to industry concerns that the current situation could place trustees in a position where the right to transfer somehow still subsisted, although the trustees could not action the transfer.

I also take this opportunity to clarify the purpose of Amendment 30, which I spoke to on Report. That amendment inserted a new limb into an existing regulation-making power in Section 101F(6A) of the Pension Schemes Act 1993. It created a power to disapply, in prescribed circumstances, the right of prescribed persons to transfer pension rights acquired as a consequence of divorce. In describing that amendment, I stated that it restored an existing power. I now understand that this is in fact a new power which expands upon the narrower existing power. I hope that noble Lords will accept this new amendment to align Northern Ireland legislation, along with my clarification of the operation of Amendment 30 made on Report.

As this is the final amendment to which I will speak, before I sit down I would like to take a moment to thank the Opposition for their constructive and positive engagement in this process—I do so sincerely; their engagement has been valuable. I also thank colleagues across the House who have dedicated their time and expertise to scrutinising and improving the Bill. It has been the House of Lords at its best. I think we can all say that your Lordships’ House has done a good job in scrutinising the Bill and that it goes back to another place a much better Bill than it was before.

A significant amount of work goes into preparing a Bill and supporting its passage through both Houses, to say the very least. This Bill contains a wide range of measures and has involved a number of different policy teams from the Department for Work and Pensions, Her Majesty’s Treasury and the Ministry of Justice. They have worked unstintingly and with dedication. I am grateful to them and to the excellent draftsmen in the Office of the Parliamentary Counsel, who have worked very hard on this Bill.

I am also indebted to my noble friend Lord Newby for his considerable work and assistance on the Bill, to my right honourable friend Steve Webb, the Minister for Pensions, for his advice and help, and to my noble friend Lord Freud for his support. With that, I beg to move.

My Lords, I again thank the Minister for clarification of the amendments, and these are obviously acceptable. I also thank him for the clarifications he has given throughout the Bill’s passage, as well as for the courtesy that he and his fellow Ministers have shown to this House and for the help that he has given to the Opposition as we have debated the issues. I also thank the civil servants for the support that they have given to the Opposition in answering the questions that we have raised.

As we come to a close in the Bill’s passage through this House it is worth reminding ourselves that on Second Reading we considered two Bills together—this one and the then Taxation of Pensions Bill—as it had been recognised that the two were inextricably linked. That has clearly been shown to be the case during our deliberations generally and in our consideration of this amendment. The speed between the announcement of pension freedoms and flexibilities in the Budget last year and implementation of the policy in April of this year has led to a huge number of amendments and policy clarifications, with many significant regulations still to come. Let us remember that implementation is barely nine weeks away.

Although broadly supporting the policy, we have tried during these debates to ensure that the interests of the public have been paramount and properly protected. We have sought and received assurances from the Government that the policy is clear and fully thought through, including in our debate today on the treatment of pension funds for income-related benefits and care costs assessment. However, in the light of today’s debate, I remain deeply concerned. We have been assured that not only will the crucial guidance guarantee service be fully in place by April but that it will have capacity and its staff will have the expertise and be fully trained to deliver a quality service for the 320,000 people who may seek guidance in the first instance.

Obviously, we are pleased that the Government accepted our argument for a second line of defence to give the public greater protection. We will continue to monitor closely the implementation of the powers vested in these two pieces of legislation. However, we remain concerned on many issues. These issues will be closely scrutinised both inside and outside this House to ensure that the public’s interests are properly and fully thought through and protected.

Finally, I thank all noble Lords who have participated in our debates. I would particularly mention the support I have been given by my noble friends Lady Drake, Lady Hollis, Lord McKenzie and, of course, Lord McAvoy and Lady Sherlock.

My Lords, I thank the noble Lord for that. Clearly, we recognise the support that we have had generally for these important pension freedoms. The noble Lord, Lord Hutton, who is not in his place, certainly spoke of this as a revolutionary measure—which it is in many ways. I accept that guidance is at the heart of it. We need to ensure that these freedoms are exercised with proper guidance and proper advice, which is where this House has been quite properly engaged, and recognise that there is still ongoing work to do, to which we will return.

Amendment 2 agreed.

Bill passed and returned to the Commons with amendments.