Financial Guidance and Claims Bill [HL] - Report (1st Day)

Part of the debate – in the House of Lords at 5:15 pm on 24th October 2017.

Alert me about debates like this

Photo of Baroness Buscombe Baroness Buscombe The Parliamentary Under-Secretary of State for Work and Pensions 5:15 pm, 24th October 2017

My Lords, this amendment, tabled by the noble Baroness, Lady Drake, is identical to the one tabled on 17 July 2017, which I have to say sounds an awful long time ago and feels it too. It would require the body to provide a pensions dashboard as part of its pensions guidance function. The purpose of pensions dashboards is to provide a clear picture of all an individual’s pension savings in one place, accessible online. Pensions dashboards are potentially an important tool to help people to take control of their retirement planning. With automatic enrolment, more people than ever before are saving into workplace pensions, and we know that the nature of work is changing, with more people taking a number of jobs in their lifetime—the noble Lord, Lord McKenzie, has just talked about 11 times possibly becoming an average. The ability of people to view their pension savings in one place could make a real difference in assisting them to plan and save for their retirement, including making better-informed choices on the financial impact on their pension provision of working longer if they chose to do so.

I promised to come back on Report with a full statement on the Government’s position on the dashboard project. The Government are firmly committed to the delivery of pensions dashboards and have restated our commitment, as announced last week at the Pensions and Lifetime Savings Association conference in Manchester by the Parliamentary Under-Secretary of State for Pensions and Financial Inclusion in another place. It was announced that, to take forward this work, the Department for Work and Pensions will take lead responsibility for the policy within the Government and manage the next phase of the project. Working with industry, consumer organisations and regulators, the department will conduct a feasibility study to examine the complex issues that still need to be addressed, such as those highlighted by noble Lords today, particularly the noble Baroness, Lady Drake. We will share an update on this work by spring next year.

The very helpful report published on 12 October by the ABI-led pensions dashboard project sets out many of the key questions to be explored, and we will look at its research findings and recommendations in detail as part of the feasibility work. We are grateful to all those organisations involved in the project so far. The aims of the feasibility study will include the following: exploring in more detail what will be of the most use to individuals to help them plan effectively for their retirement, as consumers’ needs must be at the heart of our approach; the viability and implications of different delivery models; determining a suitable framework of governance for pensions dashboards; ensuring that consumer interests are safeguarded and their personal information is protected—as the noble Baroness, Lady Drake, has said several times today, we are talking about providing a safe space for public good so it is incredibly important to get this right—and thinking through issues of regulation, standards, data security and identity verification; establishing how to ensure the widest possible contribution of data from pension providers, bearing in mind that effectiveness will be linked to how much information individuals can see in one place, while also taking account of the potential impact on industry; determining the indicative costs of potential models and how they might be funded sustainably; and setting out a pathway for delivery with provisional milestones and recommendations around communications and publicity.

I feel it is important to emphasise again that the needs of the consumer will be at the heart of any design. We want to maximise people’s engagement in their pensions, while maintaining their trust. We will ensure that consumers’ interests are properly safeguarded and their information protected. I also emphasise that our intention is to work very closely with industry and other stakeholders —consumer organisations, regulators and others—in order to take this forward.

As I said in Committee, we believe that the current pensions function of the new body is wide enough to cover a number of the delivery options, including hosting a potential future dashboard. Therefore, specifying this in legislation is not necessary or desirable, as we do not want to stifle innovation nor pre-empt the outcome of the feasibility work. To legislate now would be premature, as we still need to do a lot of work to make pensions dashboards a reality. Indeed, as the noble Baroness, Lady Drake, said, this is a very real challenge and governance issues are critical. We have to have proof of concept before we can deliver.

I am grateful to all noble Lords who have taken part in this debate. I am very pleased that I could say what I have already said this evening—so on that basis, given that I was able to set out the proposals to which the Government are committed for taking this work forward, I hope that the noble Baroness will be willing to withdraw her amendment.