The debate was opened by Financial Secretary to the Treasury, David Gauke. Shadow Financial Secretary to the Treasury, Cathy Jamieson, responded on behalf of the Opposition.
The Bill passed second reading without a vote and will now be considered by a Public Bill Committee.
Summary of the Taxation of Pensions Bill
At present, most people with defined contribution (DC) pension savings use them to buy an annuity. This is because pension tax legislation allows lump sum or flexible withdrawals only in limited circumstances. In Budget 2014, the Government announced that from 6 April 2015, people aged 55 and over would be able to access their DC pension savings when and how they choose, subject to their marginal rate of income tax. The Bill would make changes to pension tax legislation to implement this.
It would also restrict and reduce certain tax charges applying to death benefits. Related changes, such as the provision for the introduction of a guidance guarantee and a prohibition on transfers from some public service defined benefit pension schemes, except to other DB schemes, are in the Pension Schemes Bill 2014/15.
Progress of the Bill
This Government Bill was presented to Parliament on 14 October 2014. This is known as the first reading and there was no debate on the Bill at this stage.
Keep up to date with all the proceedings and documentation, including amendment papers, on the Taxation of Pensions Bill and find out how a bill becomes an Act of Parliament.
House of Commons Library analysis
The House of Commons Library produces briefing papers to inform MPs of key issues. The papers contain factual information and a range of opinions on each subject, and aim to be politically impartial. The Library has published the following briefing paper for the second reading.
What happens at second reading?
At second reading the House debates the whole principle of the bill. It usually takes place no sooner than two weekends after first reading.
The Member in charge or the Minister moves the motion 'that the bill be now read a second time'. MPs then debate the bill. At the end of the debate the Speaker determines whether there are any objections to the motion being debated and asks for the Ayes and Noes.
Members voice their opinion, and if no objections are made, the bill passes second reading without a vote. If the Speaker believes Members have voiced disagreement, a division is called and a vote taken.
What happens after second reading?
The Bill will now go to a Public Bill Committee for consideration following the agreement of the House to a programme motion.
Proceedings in the Committee are expected to be brought to a conclusion on Thursday 20 November 2014, but may finish sooner.
Watching proceedings from the public gallery
UK residents and overseas visitors can watch proceedings in the House of Commons by visiting the public gallery.
This article was produced by the Commons Digital Outreach Team. Follow the @HouseofCommons on Twitter for updates on the UK House of Commons Chamber.