Laura Trott
MP for Sevenoaks · Conservative · United Kingdom
“Well, that is a load of rubbish. The Secretary of State says that she is proud of the action that the Government are taking on pay. May I suggest that one of the reasons teachers are angry is that they still do not know their pay?”
“The resignation of the Prime Minister this morning was a damning indictment of the record of this Government over the last two years. Part of the Prime Minister’s legacy will be teacher morale at an all-time low.”
“We have moved so far, and things have only changed because of the unity of those on the Opposition Benches, because of Lord Nash’s brilliant campaign and because of the coalition behind Raise the Age.”
“On Friday, after Labour MPs had repeatedly blocked a social media ban for under-16s, we had a new proposal from the Government. It was not a serious response to the issue we are facing. It gave the Government three years to take unspecified action on social media, which was nowhere near good enough. Today, that has changed.”
“My right hon. Friend is always correct to be worried, but he will know that in Lord Nash’s amendment a 12-month delay was written in. I think it is reasonable to give the Government some time to bring the measure forward.”
“I welcome the Government’s constructive engagement on this issue, and we see a new proposal today that has a much more acceptable timeframe, albeit not as short as I would like. Every month of delay just leaves children more exposed to the harms of social media online.”
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“In January, I launched a consultation on proposals for a value for money framework, which aims to address that by shifting the focus from costs to ensuring that savers get value for money. The Department for Work and Pensions has published statutory guidance to assist trustees with determining the criteria for specified performance-based fees to be considered outside the charge cap. The guidance is also clear that trustees should seek professional advice on their investments where performance-based fees are prevalent. To ensure transparency to members, any fees incurred are required to be disclosed and value to members is assessed in the scheme chair’s annual statement.”
“Research shows that just 7% of UK pension assets are invested in illiquids, compared with an average of 19% among their European and North American counterparts. The Australian DC market invests, on average, somewhere in the region of 20% of assets in illiquid investments; that includes investment in major UK assets such as Heathrow airport and the King’s Cross redevelopment project. Feedback in recent consultations highlighted that the relationship between performance-based fees and the charge cap can be a barrier to private investment. Although the cap has successfully reduced costs, it has arguably led to more focus on costs rather than on the returns that different asset classes can provide.”
“Adding performance-based fees to the list of charges that fall outside the regulatory charge cap is intended to make it easier for schemes to access new investment opportunities, such as the infrastructure needed for the transition to net zero. The Government believe that professionally managed investments in those assets, known as illiquids, are well suited to pension savers, given their long-term investment horizons and potential to provide members with higher net returns. It is estimated that less than 10% of DC investments are in illiquid assets, and the pension charges survey 2020 evidenced that two thirds of DC schemes had no direct investment in illiquid assets in their default arrangements.”
“The change will help to put schemes on a more even playing field with other institutional investors when accessing the same range of investment choices. The regulations also place new duties on the trustees of most occupational DC schemes to disclose additional information about their investments. These duties are designed to ensure that trustees of DC schemes reflect on their investment decisions as part of their ongoing fiduciary duty to create a diversified investment strategy that delivers for savers. Good investments are central to a well run pension scheme, and decisions made by trustees have a significant impact on growing savers’ pots.”
“I beg to move, That the Committee has considered the draft Occupational Pension Schemes (Administration, Investment, Charges and Governance) and Pensions Dashboards (Amendment) Regulations 2023. It is a pleasure to serve with you as the Chair, Ms McVey. The draft regulations, which were laid before the House on 30 January, continue the Government’s commitment to ensure that millions of hard-working savers in occupational defined-contribution pension schemes get the best possible outcomes. Subject to approval, the regulations will help DC pension schemes to make greater use of performance-based fees, which are payable to investment fund managers when they deliver high returns on their investments.”
“I will be able to confirm that nearer the time. It is important that we get this right, and get it right first time, so that we do not have to do this again. What the dashboard will do is incredibly important and will make a massive difference. We know that lots of people have lost their pots. It is vital that we increase adequacy for pension savers, and the regulations are a vital part of that. I am pushing as hard as I can to ensure we keep to the deadlines as much as possible. We can move around the upload deadline, but I would like to keep as close as possible to when savers should be able to access this. I will come back to the House before summer recess to hopefully give more detail on that.”
“Again, I am grateful for the cross-party support for moving in this direction. Not only is it important for the UK economy as a whole but, from my perspective most important, it is in the interests of pension savers. The dashboard is a complex project, which had a long history before I came into this post. When I got the job, I asked for a look into how it was going and whether we thought we could meet the deadlines that were set out. I have some concerns about what I saw, and that is why a reset programme is in place at the moment. Members were all absolutely right to say that we need to get this correct the first time round. I have committed to come back to the House to put new deadlines in place, and I would like to be able to do that before the summer recess—that is certainly what I am working towards.”
“I am grateful for the cross-party support for the auto-enrolment work we are taking forward. I look forward to participating in a similar Committee, with a similar cast list, next week. In the interests of savers, we have ensured that fees are payable only where there is a return. The exact schedule of the return and its rates will be a discussion between trustees, scheme members and investment managers. We brought that into the regulations to ensure that the interests of savers are at the heart of everything we are trying to do. Green energy infrastructure is exactly what we are trying to promote as part of the illiquids reform. To be clear, I do not think that will be the be-all and end-all of trying to get more investment in illiquids, but it will take us a large degree further forwards.”
“Yes, absolutely. When I come back with the regulations, I can provide an update on the spending. I reassure the hon. Gentleman that part of what the reset is doing is looking at the expenditure to ensure that it is in hand. I will have more to say about that when we come back. The shadow Minister mentioned NI numbers, and that is one of the things we need to look at again. It is really important. I have had representations from industry about this, and I had a meeting on it this week. It should potentially be incorporated, and that is part of what we are looking at as part of the reset programme.”
“We are definitely taking this a step further now. In my time as pensions Minister, I have tried to really focus on the value for money, rather than the charges, and that is a shift. We are a step further into our automatic enrolment journey. We now see that we have the coverage, which is really positive, but we need to improve adequacy. In my time as pensions Minister, I will really focus on that and getting returns to savers so they can build up their pot. It can make a massive difference to how effective someone’s ultimate retirement pot is in giving them the retirement they want, and this is another step in that direction. It has been a journey, and this is additional to what we have done previously.”
“The Cabinet Office has been involved in this. Every big project goes through a major project review process, so the Cabinet Office has been involved. Automatic enrolment has been a huge success. It has led to nearly 11 million people, as of January 2023, joining a pension scheme, many for the first time. However, being enrolled in a pension scheme is not enough; pension schemes must continue to ensure they are delivering the maximum return for their savers, and illiquid investments will be a huge part of that. I commend the regulations to the Committee. Question put and agreed to.”
“The Government are committed to helping pensioners with the increased costs of living. From April, pensioners will receive the largest ever cash increase in the state pension, and pension credit will also be uprated by 10.1%.”
“The ULEZ is an outrageous attack on pensioners who can least afford it, and I pay tribute to my hon. Friend for the amazing work he is doing to fight it and to help all pensioners in his constituency. I would be delighted to visit him and see that work for myself.”
“The hon. Gentleman will know that the new state pension is very beneficial for women. We know that under automatic enrolment, more women than ever have got a private pension. On the specific matter he asked about, he will know that there is ongoing work by the ombudsman, and I cannot comment until that is completed.”
“In 2021-22, almost 18,000 pensioners in Kettering, over 60,000 pensioners in north Northamptonshire and more than 9 million pensioners in England received a winter fuel payment. We estimate that similar numbers will have received the £300 pensioner cost of living payment in 2022-23.”
“I am delighted that the Bill introduced by my hon. Friend the Member for Stoke-on-Trent North (Jonathan Gullis) passed Second Reading on Friday, and I look forward to its Committee next week. This excellent piece of legislation will bring 18 to 22-year-olds into automatic enrolment in full for the first time, and will ensure that people are saving from the first pound earned—two vital steps to ensure that people get the retirement that they want.”
“My hon. Friend is absolutely right, and I congratulate him on his brilliant Bill, which will help women, the lowest paid and part-time workers in Stoke-on- Trent, Kidsgrove and Talke, and beyond.”
“Although many factors create inequality in pension outcomes, most notably the gender pay gap, I have started working with key stakeholders and colleagues across Government to create a framework to understand the challenge and also to produce a definition of the gender pensions gap. Agreeing a definition, as discussed by many Members today, is a crucial first step. That will allow us to agree a suitable metric to monitor progress and begin reporting on the issue. Again, I need collective agreement before I can say more, but I will come back to the Committee when I have a timeline for that.”
“That will give younger people and people in part-time jobs, particularly women, the opportunity to be brought into the world of pension savings for the first time. I know the Committee is keen for me to set out a timeline. I, too, am keen to set out a timeline, and as soon as I have collective agreement I will come back to the Committee and the House to announce that. In its recommendations the Committee also asked the Government to look at measures to close the gender pensions gap, which is something we can all agree on. My Department regularly monitors the contribution and participation rates by gender and regularly publishes the data in our workplace pension participation and savings trends publications. As discussed, I want to take that one step further and begin monitoring and reporting on the issue regularly.”
“AE facilitated a dramatic shift in workplace pension savings, with 86% of eligible employees in the private sector now participating in a workplace pension. The Government are committed to building on the success of AE by implementing the outcomes of the 2017 review, as endorsed by the Committee. I am pleased that there is a widespread consensus on that. We will reduce the age at which people are auto-enrolled from 21 to 18, as well as removing the lower earnings limit. I heard what the hon. Member for Glasgow East (David Linden) said about lowering the age to 16—he tells a powerful story—and we will keep that under review. The 2017 recommendations will change the landscape for the better. They will enable people to save for longer and begin their savings journey from the first pound of their earnings.”
“We have laid a solid foundation to enable people to take responsibility and plan more effectively for the retirement that they want. We have had numerous pension successes, with the most notable mentioned by everyone here today: the successful delivery of automatic enrolment, which has got 10.8 million more people into saving for retirement. However, the way that people save has undergone a significant shift in recent decades by shifting the retirement outcomes responsibility on to individuals rather than employers. That has thrown up policy challenges, which we have discussed today and were rightly considered in the Committee’s report. I turn now to the future of automatic enrolment. Last year was the 10th anniversary of AE, which was introduced under a Conservative Government.”
“It is a pleasure to serve under your chairmanship, Mr Hosie. I thank the Work and Pensions Committee for its report and the important role that it plays in scrutinising the work of the Department. I also extend my thanks to the Chair of the Select Committee, the right hon. Member for East Ham (Sir Stephen Timms), for securing this debate. We have had thoughtful contributions from everyone here. The Committee’s report rightly raises key areas for reflection in our ongoing story of pension saving. The pensions landscape has undergone substantial change in recent years with the new state pension, increased pension saving through automatic enrolment, and increased choice through pensions freedoms, backed up with free, impartial guidance.”
“Friend the Member for Torbay (Kevin Foster) that although we welcome all ideas for boosting self-employed pension savings, we do not think that mixing them with the national insurance system is workable. Many Members mentioned the gig economy, and we are continuing to work with the Pensions Regulator and BEIS on this complex issue. As the right hon. Member for East Ham outlined, the Department’s view is that many gig economy workers are already eligible for automatic enrolment, including those on fixed-term or zero-hours contracts and agency workers. I heard what he said about the guidance produced by BEIS, and I will feed that back to that Department.”
“This includes scoping the feasibility of building and testing retirement savings solutions within compatible software used by the self-employed to manage their money. We are also keen to explore and test hybrid saving vehicles that combine accessible and illiquid savings, which could preserve some control for individuals in managing their short-term finances alongside saving for retirement. The next stage of trialling will also build on the evidence from the work with HMRC to test the capacity of nudges to pension guidance systems installed within the existing assessment system, with a view to encouraging the self-employed to start saving. The Government have no intention to make automatic deductions for the self-employed via the making tax digital system, and we agree with my hon.”
“Nest Insight has recently published the results of its trials on behavioural messaging and savings mechanisms on financial digital platforms and money management apps, to test the role of tech-based nudges and the value of flexible savings. My intention is to make retirement savings easier for the self-employed. To do that, I want to better understand the touchpoints through which the self-employed engage with the Government, which will be the most effective at encouraging them to save into a pension pot. So far, the most obvious point is the tax system. We have begun work with the UK trade body for business software developers to help us better understand the software market and explore the opportunities, both current and new, to support self-employed people to save for their retirement.”
“I think annual reporting would make sense, but this is something that we need to look into further. I will come back to the right hon. Gentleman and his Committee. The hon. Member for Glasgow East spoke about the gender pensions gap. We have seen progress in women’s participation, particularly in automatic enrolment, where they are now slightly ahead of men, but I agree that we need to see further work on the issue. I intend to drive that forward. I turn to measures for the self-employed. When I started this role, I found it striking how low pension savings were among the self-employed. As the right hon. Member for East Ham is aware, the success of AE is down to the employer enrolling the member, which is clearly something that the self-employed do not have.”
“I understand and respect the right hon. Gentleman’s concerns, and I will be having further meetings with the Pensions Regulator about this issue. I look forward to discussing the outcomes of those when I appear in front of his Committee.”
“The introduction of simple annual statements, the midlife MOT and the pensions dashboard will make pensions more understandable to the saver and empower them to take control of their retirement outcomes. My hon. Friend the Member for Amber Valley (Nigel Mills) was entirely right that the pensions dashboard will be crucial to that. We expect to see on the dashboard an understanding of what current savings will lead to as retirement income. What he said about comparing that to what others have was really interesting, and I will take that away.”
“The Work and Pensions Committee is right to raise concerns about ensuring pensions adequacy. The shift from the promise of retirement income through defined benefit to defined contribution places responsibility on the saver to ensure they have the outcome they want, but I do not think there is widespread understanding of that among the general public. Personal circumstances obviously dictate what individuals consider an adequate level for retirement savings. It is my role as the Pensions Minister to enable people to save adequately, as well as to ensure pension-maximising returns on their savings. The key to that is empowering savers to take control of their financial future.”
“I think what we need to do is set out a plan. I accept that when we look at the various mechanisms that I have outlined today, we should outline the impact that we think they should have. I commit to go away and have a look at that. My hon. Friend the Member for Torbay asked what the Department is doing to develop sectoral pension schemes and whether they can be made available for gig economy employers. Collective defined contribution schemes have the potential to transform the UK pensions landscape. He will know that we introduced legislation to allow them for single employers last year, and we are currently consulting on multi-employers. They are really exciting and could be a way forward in this space. I am conscious of time; I will obviously write to hon. Members to cover anything I do not get to.”
“If we are going to deal with adequacy, we need to ensure that investments in pension schemes return the maximum amount that they can for savers. Illiquids are part of the story in making that happen.”
“My hon. Friend makes a typically excellent point. He is right that we have a lower investment in illiquids than many of our European counterparts. We are at 7%, and they are at 15% or 16%. Last week, I announced a change in regulations, which I believe will come to the House in around March. It will mean that the performance charges can be passed on for the first time, which will hopefully take away a barrier to investment in those types of asset. It is of course for the pension trustees to make investments in the best interest of pension savers, but it is important that we do not put any barriers in the way of that. My hon. Friends the Members for Grantham and Stamford (Gareth Davies) and for Amber Valley are right that we need to focus on returns.”
“In addition, the state pension has been boosted significantly under this Government. I thank the Committee for all its work on the stronger nudge. It is important to recognise, as my hon. Friends the Members for Amber Valley and for North Norfolk (Duncan Baker), and the hon. Member for Glasgow East (David Linden), have done, that Pension Wise is consistently given very high feedback. About 47% of pots in 2021-22 were accessed for the first time with Pension Wise guidance. It is important to look at the amounts. If the pot is very small, say £100, it is potentially less valuable to have a Pension Wise appointment, than it would be for a pot of multiple thousands. I note that 73% of pots larger than £100,000 were accessed using Pension Wise guidance. It is important to look at that graduation.”
“If there is a specific issue with that, I am of course happy to talk to the hon. Gentleman about that separately. I want to give the right hon. Member for East Ham time at the end to sum up, so I will try to get through the rest of my speech quite quickly. On the generation X issue, we have an issue with the people who fell into the gap between the mid-1990s and 2010, when auto-enrolment was introduced. I praise the work of the Work and Pensions Committee, but I hope the right hon. Gentleman and the hon. Member for Reading East (Matt Rodda) would accept that not enough was done between 1997 and 2010. I cannot wave a magic wand and make that right, but I can raise awareness through pension dashboards and help boost returns through value for money, as discussed.”
“It is absolutely the case that people who want or need guidance should get it. As I was coming to, we are seeing a positive impact with stronger nudge, which we should continue to evaluate. I am conscious of time, so I will wrap up. It is vital that we put pension savers at the heart of everything we do. I am grateful for the comprehensive and thoughtful discussion today, which I look forward to continuing in future.”
“The first review of the state pension age following the Pensions Act 2014 was undertaken in 2017, informed by both the Government Actuary’s report and the independent report undertaken by John Cridland. As I have set out, Cridland recommended bringing forward the increase in the state pension age to 68 from 2044 to 2026, as set out in legislation, to 2037 to 2039.”
“Member for Reading East (Matt Rodda), Labour legislated for it to increase to 68 in 2044-46, but, following the Cridland review of 2017, the current Government policy is to bring the increase to 68 forward to 2037-39. That is the baseline; we are required under law to review it every six years, and that is what is now being undertaken. As we heard from my hon. Friend the Member for Amber Valley, the coalition Government of 2010 to 2015 were committed to the “core principle” that people should spend, on average, “up to one third of their adult life drawing a State Pension.” They were also committed to giving individuals at least 10 years’ notice of any changes affecting them.”
“I thank my hon. Friend the Member for Amber Valley (Nigel Mills) for raising this important issue, and all the other Members who have contributed to the debate. The Government remain committed to ensuring that older people can live with the dignity and respect they deserve, and I absolutely reaffirm that the state pension is and will remain the foundation of state support for older people. As has already been pointed out today, changes in the state pension age have been made in a series of Acts by successive Governments from 1995—when the state pension ages of men and women were equalised—onwards, following public consultations and extensive debates in both Houses. The state pension age is currently 66, and will increase to 67 in 2026-28. As was mentioned by the hon.”
“I had a suspicion that the right hon. Gentleman might bring that up. As he rightly pointed out, I have written to him today to explain the rationale behind this, but I will confirm that both documents will be published in full. I look forward to discussing them with his Committee in due course.”
“As I have outlined, the Government take the setting of the state pension age very seriously. I look forward to being able to discuss this matter further—I am sure we will—when the Government finally publish their second review.”
“For the first time, from April 2023, the full rate of the new state pension is worth over £10,000 per year. Automatic enrolment is having a transformational effect on private savings. Over 10.8 million people have been automatically enrolled in a workplace pension, helping to deliver about an additional £33 billion into pension savings in real terms in 2021 compared with 2012. The hon. Member for North East Fife mentioned the PHSO inquiry. She will know that that is ongoing, so it would be inappropriate for me to comment on it until it concludes. The Government are committed to ensuring that the state pension continues to provide the foundation for people’s retirement income and are proud of the support they have given pensioners since 2010. I welcome today’s debate and thank my hon. Friend the Member for Amber Valley.”
“The review has not yet concluded—it is very important to emphasise that, given some of the comments today—and I will not pre-empt its outcome. The Government are committed to ensuring that older people have dignity and security in later life, regardless of where in the UK they are living. The Government introduced further targeted support, including cost of living payments of up to £900 for the most vulnerable households and an additional £1 billion, including Barnett impact, to enable the extension of the household support fund in England in the next financial year. Since 2010, the full yearly amount of the basic state pension has risen by over £2,300 in cash terms. That is £790 higher than if it had been uprated by prices, and £945 more than if it had been uprated by earnings.”
“The Government continue to provide substantial support for people who are unable to work. My hon. Friend the Member for Dover (Mrs Elphicke) made some important points about age discrimination. The Government’s business champion for older workers, Andy Briggs, spearheads the Government’s work to promote the benefits of older workers and multigenerational workforces across England, influencing them strategically and by offering practical advice. I will ensure that my hon. Friend’s points about discrimination are passed on to the Department for Business, Energy and Industrial Strategy. The review will aim to keep the right balance between affordability, sustainability and fairness between generations.”
“With respect to the question of whether Baroness Neville-Rolfe will appear before the Select Committee on Work and Pensions, that is a matter for the Committee and for her. Alongside examining the implications of the latest life expectancy data, the Government review is assessing the costs of an ageing society and future state pension expenditure, as well as considering labour market changes and people’s ability and opportunities to work up to state pension age, bearing in mind recent trends in life expectancy. My hon. Friend the Member for Amber Valley highlighted the position of those who cannot continue to work. The review will evaluate the impact of previous changes to the state pension age for all individuals, including those with long-term health conditions or disability.”
“Nevertheless, despite the slower improvement rate, ONS projections continue to show increasing life expectancy over time, and the number of people over state pension age is expected to continue to rise. I can also confirm for the hon. Member for North East Fife (Wendy Chamberlain) that the review will consider the latest recommendations, as well as a wide range of other evidence, before reaching any conclusions about the state pension age. The second report that will be taken into account is an independent report by Baroness Neville-Rolfe, which will consider recent trends in life expectancy and the range of metrics that we could use when setting the state pension age, including the metrics mentioned by my hon. Friend the Member for Amber Valley. We will publish both documents in full.”
“The review must be published by May 2023, in accordance with section 27 of the Pensions Act 2014. At the autumn statement, the Chancellor committed to concluding the review in early 2023. As part of the second review, the Secretary of State is considering evidence from two independent reports. The first, a report from the Government Actuary, assesses the latest life expectancy projections from all regions of the UK. There has been a lot of talk about life expectancy today, so I want to put on record the fact that the most recent projections from the Office for National Statistics show a slower rate of improvement in life expectancy than those that informed the Pensions Act 2014 and the Pension Schemes Act 2017.”
“As I have said, they will be published in full. On the timing of publication, there is work going on in Government to undertake the review. Once it is finished the documents will be published. The 2017 review was based on a recommendation to aim for “up to 32%” as the average proportion of adult life spent in receipt of state pension. The review used 2014-based life expectancy data. The Government accepted those recommendations, subject to a further review, before tabling the requisite legislative amendments. The savings from bringing forward this rise to 68 have already been included in published fiscal forecasts. On 14 December 2021, the Government launched the second periodic review of the state pension age, and work is now under way to complete it, as required by legislation.”
“I hope hon. Members know that pension credit take-up is a priority for me and for the Government. Our £1.2 million communications campaign has been ongoing since April. We had a huge push before Christmas, ahead of the cost of living payments, and I am grateful to the many hon. Members who came to the drop-in session. In addition, I know that my hon. Friend does a huge amount of work in his constituency to boost take-up.”
“I am delighted to tell the House that we saw 7,200 claims in the week commencing 12 December, which is a 177% increase on the previous year. I thank all hon. Members who have worked hard in their constituencies to make this happen.”
“I am concerned to hear of that individual case and if the hon. Lady would like to write to me, I will look into it. More broadly, we know that there have been delays; that is partly because the number of claims doubled in 2022. I am pleased to say that in February we expect claim waiting times to get back to normal, but I will, of course, report back to the House on how we are doing on that.”