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| Minister fuels pension debate with Lamborghini comment | Minister fuels pension debate with Lamborghini comment |
| (35 minutes later) | |
| The government has defended a minister who said pensioners would be free to spend their savings on a Lamborghini following a rule change in the Budget. | |
| From 2015, people reaching retirement age will be able to use pension pots however they want, rather than having to buy a guaranteed annual income. | From 2015, people reaching retirement age will be able to use pension pots however they want, rather than having to buy a guaranteed annual income. |
| Pensions minister Steve Webb said it was people's "choice" whether to buy Italian Lamborghini sports cars. | Pensions minister Steve Webb said it was people's "choice" whether to buy Italian Lamborghini sports cars. |
| No 10 said people were free to spend money in their own way. | No 10 said people were free to spend money in their own way. |
| Chancellor George Osborne has dismissed fears newly retired people could "blow" their pension pot. | Chancellor George Osborne has dismissed fears newly retired people could "blow" their pension pot. |
| Mr Webb, a Liberal Democrat, told the BBC's Norman Smith he was "relaxed" about how people spent their money. | Mr Webb, a Liberal Democrat, told the BBC's Norman Smith he was "relaxed" about how people spent their money. |
| He said: "If people do get a Lamborghini, and end up on the state pension, the state is much less concerned about that, and that is their choice." | He said: "If people do get a Lamborghini, and end up on the state pension, the state is much less concerned about that, and that is their choice." |
| The Lamborghini Huracan, unveiled earlier this month at the International Motor Show in Geneva, is to be sold at about £165,000. | The Lamborghini Huracan, unveiled earlier this month at the International Motor Show in Geneva, is to be sold at about £165,000. |
| A Downing Street spokesman backed Mr Webb, saying it was not up to the government to give advice on how people chose to manage their savings. | A Downing Street spokesman backed Mr Webb, saying it was not up to the government to give advice on how people chose to manage their savings. |
| He added that under the rule changes pensioners were guaranteed independent advice before making any decision about their pension provision. | He added that under the rule changes pensioners were guaranteed independent advice before making any decision about their pension provision. |
| Personal finance experts said the proposed changes to annuities - bonds which provide a fixed income for the rest of the owner's life - would significantly change the way people fund their retirement. | Personal finance experts said the proposed changes to annuities - bonds which provide a fixed income for the rest of the owner's life - would significantly change the way people fund their retirement. |
| It is expected that anyone over the age of 55 who belongs to a private pension scheme (as opposed to a final-salary scheme) will be able to take out their savings as a lump sum to spend or invest as they wish. | It is expected that anyone over the age of 55 who belongs to a private pension scheme (as opposed to a final-salary scheme) will be able to take out their savings as a lump sum to spend or invest as they wish. |
| Mr Osborne dismissed concerns that retired people would spend all their pension at once and end up relying on the state. | Mr Osborne dismissed concerns that retired people would spend all their pension at once and end up relying on the state. |
| "It's all part of a coherent pension reform," he told BBC Radio 4's Today programme. | "It's all part of a coherent pension reform," he told BBC Radio 4's Today programme. |
| "So we have a more generous basic state pension, less means-testing and that enables us to get rid of a quite old fashioned set of government requirements, put in place many decades ago, that people had to take out annuities. | "So we have a more generous basic state pension, less means-testing and that enables us to get rid of a quite old fashioned set of government requirements, put in place many decades ago, that people had to take out annuities. |
| "While annuities might be right for many people, they are not right for many, and returns from annuities have been much lower over the last 15 years or so. | "While annuities might be right for many people, they are not right for many, and returns from annuities have been much lower over the last 15 years or so. |
| The Institute for Fiscal Studies said the new pension rules could mean more money for the Treasury if people opted to extract taxable lump sums from their pension pots. | The Institute for Fiscal Studies said the new pension rules could mean more money for the Treasury if people opted to extract taxable lump sums from their pension pots. |
| But, the think tank added, it was difficult to predict how people would behave and the government could be left short of money for tax cuts announced on Wednesday. | But, the think tank added, it was difficult to predict how people would behave and the government could be left short of money for tax cuts announced on Wednesday. |
| Labour's shadow chancellor Ed Balls said he supported the "principle" of more flexibility over pensions, because the annuities market is "not working" and "people are being ripped off". | Labour's shadow chancellor Ed Balls said he supported the "principle" of more flexibility over pensions, because the annuities market is "not working" and "people are being ripped off". |
| 'Beer and bingo' | 'Beer and bingo' |
| But he said scrapping the requirement to take out an annuity altogether was a potentially "reckless and irresponsible" move, which could "leave people running out of money". | But he said scrapping the requirement to take out an annuity altogether was a potentially "reckless and irresponsible" move, which could "leave people running out of money". |
| "Will people with ordinary-sized pension pots be able and encouraged to withdraw all of their pension savings from their pension pot and either try and invest it themselves or spend it?" he asked. | "Will people with ordinary-sized pension pots be able and encouraged to withdraw all of their pension savings from their pension pot and either try and invest it themselves or spend it?" he asked. |
| "And if they do, what happens when the money runs out? Who then picks up the tab?" | "And if they do, what happens when the money runs out? Who then picks up the tab?" |
| Pensions changes were among a series of measures announced in a Budget that Mr Osborne said would reward the "makers, doers and savers". | Pensions changes were among a series of measures announced in a Budget that Mr Osborne said would reward the "makers, doers and savers". |
| However, hours after he outlined his plans, the Conservatives faced a backlash over an advert highlighting changes to beer and bingo taxes. | However, hours after he outlined his plans, the Conservatives faced a backlash over an advert highlighting changes to beer and bingo taxes. |
| The online advert, tweeted by Conservative chairman Grant Shapps, said the cuts would "help hardworking people do more of the things they enjoy". | The online advert, tweeted by Conservative chairman Grant Shapps, said the cuts would "help hardworking people do more of the things they enjoy". |
| It was described as "patronising" by Mr Osborne's deputy, Chief Secretary to the Treasury Danny Alexander, who said he initially thought it was a "spoof". | It was described as "patronising" by Mr Osborne's deputy, Chief Secretary to the Treasury Danny Alexander, who said he initially thought it was a "spoof". |
| Labour said it was "ill-conceived" and "condescending". | Labour said it was "ill-conceived" and "condescending". |
| But Mr Osborne said the controversy had been "whipped up by the Labour Party who didn't have anything else to say about the economy". | But Mr Osborne said the controversy had been "whipped up by the Labour Party who didn't have anything else to say about the economy". |
| Conservative sources told BBC News they were "completely relaxed" about the tweet and "astonished" by the row, adding it would not be "pulled" because it was a "one-off" message and not part of any campaign. | Conservative sources told BBC News they were "completely relaxed" about the tweet and "astonished" by the row, adding it would not be "pulled" because it was a "one-off" message and not part of any campaign. |