Pensions Dashboards Regulations 2022

Debate between Baroness Bowles of Berkhamsted and Lord Jones

Tuesday 15th November 2022 Lords Chamber

[Baroness Bowles of Berkhamsted (LD)]

My Lords, I was not expecting to have to do the dashboards but, as the Minister will know, I intervened during the passage of the Pension Schemes Act. I was there for the money and finance bits and discovered that I had a bit of a love/hate relationship with the dashboard. At first sight I love the idea, but then—as has been relatively eloquently explained, and I will not delve further—there are all kinds of problems, ranging from operational ones to the ones that interested me most. I think I am in exactly the same space here as the noble Lord, Lord Vaux, as usual. What happens if it becomes a platform for advertising?

A good starting point is to look at paragraph 14 on page 9 of the impact assessment, which is about the rationale for the intervention and the pensions dashboard. It quite clearly mentions

“potential benefits/efficiency gains to pension providers if consumers are encouraged to keep track of their pensions, save more, potentially consolidate pots, and shop around for decumulation products”,

but those are benefits to the providers, as it says there. We need to be very clear: we want to make sure that the benefits to the providers do not leave out benefits to those with pensions.

Talking about consolidation, I understand that if there are a lot of really small pots, there is probably something to be said for sweeping those together. But having been self-employed for my entire working life, when I set up my own pension schemes I wanted a bit of diversity. I had several because I did not like the notion that one of the funds might go bust and I would be in trouble—if I had loaded it all into Equitable Life or something. Much to my disappointment, they all got consolidated into Aviva through the consolidation of the industry. Actually, that is not quite true; I still have some others. I carefully selected a completely different batch for my husband, but they also ended up all in Aviva.

Some diversity is a very good thing, because you get performance differences. You might want to phase how you take your retirement and it might prove to be more flexible. So the notion that you should force everybody to have one pot is bad news, to my mind, because you are cutting out diversity and the opportunity that that brings.

Like the noble Lord, Lord Vaux, I latch on to the comments made by the Minister about commercial exploitation. That is a very important point. These pensions dashboards will not be cheap to make. If you do one, with all the wonderful data there, you will be very tempted to exploit it in some way; yet we do not have the information in front of us because that kind of thing comes presumably through the FCA route. I apologise that my information is not as full as it should be, as I too was unable to go to the meeting that was arranged. As there are several regulators involved and several parts of this puzzle to be brought together, it would be nice to have that bigger overview instead of having it in bite-sized chunks where you cannot fully see how they inter-fit.

Most of my other points have already been raised by others and I will not go back to them. However, I was slightly curious about delegated access. Again, it was indicated that, essentially, a financial adviser could have the delegated access. When I speak to a financial adviser, I do not necessarily want them to know what I have got everywhere. Again, as I have several different pots, I can get advice about one pot and not another. Assuming that everybody should have the full view is perhaps not the way to go. I do not know whether it would be possible, but it would be good if you could somehow choose which part is visible to somebody and which is not. I would like to have seen that, but it might be rather difficult.

I also wonder what the provisions will be for others, such as family members who may become involved in trying to help some of their older people sort out their pensions. Some people want that, some do not. They will not be regulated. Will they have to have some kind of formal or legally signed document to be able to take that position? Obviously, they can be sitting at your shoulder when you access, but there will be people who are incapacitated. How will their dashboard be accessed and what will be the safeguards?

I think just about everything else has been mentioned. I will just say that I agree with a lot of the questions. In general, I accept that we need this statutory instrument because it paves the way for everything else to come, but it would have been quite nice to see more of the parallel tracks coming to the same discussion. We will have a statutory instrument or something from the FCA, which will be separate from this. It would have been nice to have them as a package, perhaps debated together, so that we could cross-compare for whether there are gaps, how the different responsibilities will be bridged and how the information will be shared. All these things are yet to come.

[Lord Jones (Lab)]

My Lords, I thank the noble Baroness for her introduction—a heroic introduction in the circumstances—and for the department’s lengthy Explanatory Memorandum. The department is clearly trying to help and has put in a lot of hard work to try to throw more light on a complicated subject. My noble friend Lady Sherlock is always up to the mark on complexity, and there is plenty of complexity in these regulations. The pensions paper is 41 pages long, which is not a criticism by any means. Surely these dashboards are positive, helpful and welcome.