Pensions Commission

Lord Beamish Excerpts

Wednesday 22nd July 2026 Lords Chamber

[Baroness Sherlock (Lab)]

The noble Lord raises an excellent point. In fact, we have seen a significant drop. In the 1990s, roughly half of people who were self-employed were saving for a pension; it is now under 20%. There are more self-employed people now and there are different kinds of self-employment. However, there is no question that that is a big dip. The Pensions Commission found that, of those whose only income comes from self-employment, only 4% were saving for a pension. One of the key tasks for the Pensions Commission is specifically to look at and recommend to government what to do about all those who are undersaving, including people who are self-employed. I am grateful to the noble Lord for raising that.

[Lord Beamish (Lab)]

My Lords, I too welcome my noble friend back to her rightful position. She talked about people working hard to save for their pensions. They include pensioners who worked at Nissan in the north-east. Many now find themselves in very dire straits, because for those who accumulated in a pension scheme before 1997, the pension trustees and company are no longer increasing it along with inflation, so those pensioners are now finding the value of their pensions diminishing. Is this something that the Government could look at?

[Baroness Sherlock (Lab)]

I am grateful—I will never be so appreciated ever again, so I am really going to enjoy this session. My noble friend raises an important point. In a sense, it is up to individual schemes what their rules are for indexing their pensions. The minimum legal requirements for indexation have to be appropriate for all DB pension schemes, because they have to strike a balance between what members need and what the employer can afford. In the end, as he will know, the strongest guarantee is a good, strong sponsoring employer. However, there are two things that may help. One is, as he may be aware from the Bill, that the Government have changed the rules to allow a wider range of well-funded schemes to release any surplus that is there, with the agreement of trustees, which could be used to go towards paying for indexation, for example, if affordable and appropriate. At the other end of the scheme, the Government took action in that Bill to look at giving indexation to those who end up in the PPF or FAS for benefits earned before 1997. That will at least help.