(6 years, 3 months ago)
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Lord McKenzie of Luton
To ask Her Majesty’s Government what progress they have made towards establishing an online pensions dashboard.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Buscombe) (Con)
My Lords, with automatic enrolment we are delivering a complete change in the UK’s savings culture. We are currently exploring the many complex issues associated with developing a pensions dashboard. Our feasibility work is nearing completion and we will report to Parliament in due course. The Government are committed to ensuring that people are supported to plan ahead for retirement, including with automatic enrolment, existing digital services and a new single financial guidance body, launching in January next year.
Lord McKenzie of Luton (Lab)
My Lords, I thank the Minister for that reply. At a time when 9 million new workplace savers are being auto-enrolled and the average worker changes jobs 11 times during their working life, there is clearly a compelling public policy argument for having mechanisms to track pension pots, including the state pension, throughout life. The DWP has estimated that 50 million pension pots, with some £3 billion in savings, would be lost without a dashboard. Already one in five adults admits to having lost a pension pot.
There is widespread support for the concept of the dashboard, although there are different propositions. We believe that the Government are right to give ownership to the DWP, as a government lead is essential. Does the Minister agree that lessons from overseas show that the best way of providing a comprehensive service is to make participation compulsory? That requires legislation. Given all the work the DWP has done, why are we considering changing tack now? What can we glean when Parliament is not sitting which we cannot not glean when it is? Is there not an issue of capacity, with the universal credit debacle overwhelming the department?
Baroness Buscombe
My Lords, let me first say that the figure of 50 million referred to is an estimate made in 2012 of the number of dormant, not lost, pension pots by 2050. To suggest that 50 million pension pots will be lost unless a pensions dashboard is introduced is wholly inaccurate: I want to make that very clear. We are looking through the whole process and at experience overseas in order to understand more about pensions dashboards. The noble Lord knows that the whole process is very complex. We are working through the options around scheme participation in any potential pensions dashboard. The decision whether to compel participation depends on a number of issues, such as the functionality, delivery model and governance of the dashboard. We will set out the Government’s view in due course.
Baroness Kramer (LD)
My Lords, can the Minister address this feet-dragging? George Osborne announced that this project would go ahead in 2016, it was meant to be up and running next year, and Guy Opperman, in his role, constantly says that he is actively supporting it. The industry is—to put it mildly—cross, having done all the work it needs to contribute towards creating a pensions dashboard. It is vital so that savers can make the best investments of their pension money, and it is key to fraud prevention. Both of those are crucial issues. Can the Minister confirm that the rumours that the scheme is in jeopardy are false, and can she please finally give us a timetable?
Baroness Buscombe
My Lords, the noble Baroness will know that we are talking about something quite complex. As we look at it, the more we explore and the more questions we ask ourselves and the industry. My honourable friend in another place was right to talk about what was set out in 2016. We want to be careful to ensure that we cover all the challenging issues associated with the dashboard, not least questions of governance, funding, what role the Government might have and whether legislation is necessary. The department has been working closely with stakeholders across the pensions and financial services industry, the regulators, consumer bodies and others, as part of this feasibility study.
Baroness Altmann (Con)
My Lords, I welcome the potential of the pensions dashboard and I thank the Minister for her answers so far. It does not sound as if the whole project has been parked, but can my noble friend comment on the accuracy of pensions data and whether the problems of errors in pension recording have led to some concerns about a dashboard containing past pension records? Can she perhaps reassure the House that, at the very least, all auto-enrolment pension records could be put on to a dashboard funded by the industry—not by government but facilitated by her department?
Baroness Buscombe
First, I congratulate my noble friend on being appointed as the chair of pensionsync. I noticed that the question she has just asked was on her blog this week, suggesting that it is perhaps due to errors. I entirely refute that suggestion. The reality is that we already have, as my noble friend well knows, the online Pension Tracing Service to help people more easily locate their pension savings. We have also established the “Check Your State Pension” service, which has provided more than 9 million estimates since its introduction in 2016. We also have the development of a single financial guidance body. This department is doing a huge amount towards a revolution in the way that we support people to save in their retirement. Auto-enrolment, to which nearly 10 million people have actually signed up in the last six years, is an example of where we are working with this quiet revolution.
Lord West of Spithead (Lab)
My Lords, the Minister will be aware that war pensions were included in the figure of 2% of GDP that is spent on defence. It is therefore a false figure. Can she assure us that this will be looked at within the ongoing modernising defence programme so that we actually have a realistic amount of money for defence to support the Armed Forces, not least to have some more ships so that when we are all away on holiday on the oceans, we see some grey funnel line around rather than anything else?
Baroness Buscombe
I thank the noble Lord for his question. He knows my particular affection for the Navy.
Noble Lords
Baroness Buscombe
I have a personal interest. That said, I must be clear with the noble Lord that there has been growth in the budget for the Navy, which is ongoing, and for the Armed Forces overall. His point about war pensions is an important one and if I can enlighten him any further, I will certainly attempt to do so in writing. We are doing all we can at the Department for Work and Pensions to support the lives of those in our Armed Forces in every way that they impact upon our department. That is for both those who are serving and those who have served this country well.