Pensions Dashboard

Matthew Offord Excerpts

Wednesday 6th February 2019 Westminster Hall

[Dr Matthew Offord (Hendon) (Con)]

I beg to move,

That this House has considered the pensions dashboard.

It is a great pleasure to serve under your chairmanship, Ms Ryan. For many people—particularly younger people—pensions are not a priority. In the early years of anyone’s career, their financial demands usually concern paying off student debt and paying for accommodation, mortgages and travel, no doubt with a bit of socialising thrown in. Only when people gain responsibilities such as a partner, a spouse, a mortgage or children do their minds turn to providing for the future.

Some people are fortunate enough to be provided with a pension through the terms of their employment. That is particularly true for those who work in the public services. Unfortunately, in the past, those who worked for private employers and the self-employed were unable to access the same financial products. There were a variety of reasons for that, including affordability, knowledge of pension products and simple ignorance about how to start a pension. I am pleased that the Government have addressed those problems and that in order to allow employees—our constituents—to understand the level of their pension contributions, the Department for Work and Pensions has proposed the pensions dashboard, which we are speaking about today.

A pensions dashboard is an online service that allows people to see information from multiple pensions all in one place. It is a welcome step towards better financial awareness for everyone.

[Julian Knight (Solihull) (Con)]

I congratulate my hon. Friend on securing the debate. The fact that it is so well attended shows exactly how important the subject is to our constituents. My hon. Friend will probably recognise that when the pensions dashboard was first suggested, it was seen as something that might not happen, but now we are on the cusp of it. Does he agree with me that it would be good to see such data sharing across the whole financial services industry? It benefits consumers and gives them power over their own information.

[Dr Offord]

My hon. Friend is entirely right. I certainly would like to see that across a range of financial instruments. Recently, I was required to find the level of my ISA trust fund. In the past I would receive a statement only every six months, but nowadays I can go online and use my PIN to verify my identity and see my daily amount. I can see the value of my trust fund here today. When I say trust fund, I mean the one I have paid into over the years, rather than one that was provided by my parents.

[Mr Jim Cunningham (Coventry South) (Lab)]

I congratulate the hon. Gentleman on securing the debate. Like me, he has probably had a large number of constituents write to him wanting the dashboard to be as simple and clear as possible, and to contain as much information as it can. Would he agree that the Minister should look at that, so we get a sensible system that people actually understand?

[Dr Offord]

I believe that proposal is a good one, but whether it is looked at by the Minister or the steering group—I will come on to that—is another matter. As the debate unfolds, perhaps some of those questions will be answered. I always say that the dashboard should be made as simple as possible, so that people can engage with their pensions and their future, which is a good thing.

[Nick Thomas-Symonds (Torfaen) (Lab)]

I am grateful to the hon. Gentleman for giving way, and I congratulate him on securing the debate. I entirely agree that it is a very good idea to have all this information in one place, but does he agree that there must be appropriate regulatory compliance concerning the way the data is held?

[Dr Offord]

I do agree, and the hon. Gentleman has anticipated some of my speech. That is a good point, and I will come on to it in proper detail.

[John Howell (Henley) (Con)]

Is it not true that we need to get the governance of the pensions dashboard correct? We have just seen that a hotel booking website has had to end its misleading sales activities. Is there a risk that without the right level of governance, something similar could happen to the dashboard?

[Dr Offord]

Once again, my hon. Friend has anticipated my speech. He is absolutely right; we need to get this right and ensure that people have confidence in the system, so that our constituents are not only keen to invest their money but reassured, after recent financial problems, that their concerns will be addressed. We will do that as part of the process.

[Janet Daby (Lewisham East) (Lab)]

I thank the hon. Gentleman for securing such a significant debate. Does he agree that the Government must lead the implementation of the pensions dashboard, if they are to compel all pension providers to take part and if the dashboard is to be a truly useful tool for many retired people aged 55 and over who do not know the size of their savings?

[Dr Offord]

I hope that the dashboard provides for those people. I was about to come to a statistic that indicates that many people do not know the size of their pension pot. That has repercussions, particularly when people retire and they suddenly realise that they will not have the level of income or the kind of lifestyle that they had expected or previously experienced. Some 25% of people over the age of 55, including those who are retired, say that they do not know the size of their pension pot. The dashboard will address that. It will offer those people and others the ability to access information about their financial contributions from multiple pensions, any time they want to, on their smartphone, iPad or computer. Effectively, it will bring our pensions into the 21st century.

[Stephen Lloyd (Eastbourne) (Ind)]

I thank the hon. Gentleman for giving way and for securing this important debate. I have been supporting and pressing for the pensions dashboard for many years, since the time of the coalition. Does he agree that it is crucial that in the next pensions Act, the Government make it a legal requirement for all pension providers to go into the pensions dashboard and provide all the necessary information, otherwise the dashboard will fail? Does the Minister—or, rather, the hon. Gentleman—agree that at this late stage, that is critical?

--- Later in debate ---

[Dr Offord]

That is a very important point. Unfortunately, I am not a Minister, but the debate provides the opportunity to put that question to the Minister. Perhaps the Minister in summing up will provide the reassurances that the hon. Gentleman seeks.

Once again, the hon. Gentleman seems to have pre-empted my speech, because I was about to name him and thank him for coming along. I was going to say that it is very pleasing that the proposal has cross-party support, and that I welcome his support and attendance, along with that of my hon. Friends the Members for North Warwickshire (Craig Tracey), for Solihull (Julian Knight) and for Henley (John Howell).

[Mr Jim Cunningham]

What about me? [Laughter.]

[Dr Offord]

Of course, if I had had any forward notice I would have thanked the hon. Gentleman as well. I am particularly pleased to see the SNP here, because the hon. Member for Airdrie and Shotts (Neil Gray) signalled his approval for the social security statutory instruments we debated on Monday, so I thank him and the SNP for that.

From the comments I have heard from the Opposition today, I understand that the proposal that we are debating is not only welcome, but something that all parties are agreed on. With that support, the Government have already engaged in a consultation about how the pensions industry can create the dashboards. In the absence of a clear industry lead, it is proposed by my hon. Friend the Minister that a new single financial guidance body should be convened to oversee an industry delivery group to enable successful implementation.

As I see it, there are two issues that some hon. Members or people outside the Chamber may be concerned about. The first is whether the pensions dashboard should be held in public or private ownership. Like some other hon. Members, I have a Merseyside pension scheme from my time of employment in local government, and as a result I would prefer the dashboard to be in private ownership. Merseyside is notoriously difficult to engage with and refuses to discuss its scheme with organisations or the financial advisers that I have had over the years. However, I acknowledge support for the provision of a non-commercial dashboard supported by the Government; some hon. Members may also agree with that.

The Department for Work and Pensions research has built on the recommendation of the pensions dashboard project that a non-commercial service, endorsed by the Government, must be made available. As key stakeholders have commented, multiple dashboards in the private sector would complement a Government-sponsored offer, which should still be available for those who would prefer it, or who may not be targeted by the market.

It was suggested by the pensions dashboard project group—and, earlier last year, by the Work and Pensions Committee—that the single financial guidance body, which launched services to the public last month, would be a sensible place to host such a dashboard. The industry delivery group will need to consider how best to implement commercial dashboards alongside the non-commercial one. Which? magazine and others across the industry have suggested that a gradual expansion, starting with a single, non-commercial dashboard, is likely to reduce the potential for confusion and help to establish consumer trust.

The second issue of contention is that passing the pensions dashboards on to the private sector will mean that there is no guarantee of compliance from all providers, and will centralise huge amounts of financial information for the private sector to access. In answer to that, I say that in developing the infrastructure for pensions dashboards, industry must adhere to the rights of the individual and principles as set out in the Data Protection Act 2018, which reflects the general data protection regulation. That includes the individual’s right to data portability and principles of accuracy, storage, access and security. There would be no aggregation of the user’s information in the storing of the data in any of the components in the dashboard’s ecosystem, other than by the pension scheme or an integrated service provider operating on behalf of the provider. That supports the overarching delivery principles of keeping data secure and putting the individual in control of their data. Access to the data would be available only to the user unless specific consent is given—that goes back to my point about Merseyside. Dashboard operators would not be allowed to access the data for any purpose unless they had the specific consent of the user.

I anticipate that the delivery group, working with the regulators, will seek to agree data standards for pension providers and dashboards. Those data standards will need to support whatever level of functionality is required through different phases of implementation and ongoing development of the dashboard service. The pensions dashboard is so important because of the number of people who have now invested in their own pension pot. In the five years from 2012, the percentage of eligible employees participating in a workplace pension rose from 55% to 84%.

[Kirstene Hair (Angus) (Con)]

I thank my hon. Friend for bringing this important debate to the House. Does he agree that the auto-enrolment programme that the Government introduced has ensured that many low-paid and younger people are also investing in their retirement? As a young person, I would say that is something we would always push into the future. The system must be accessible to young people as much as to older people, and we must ensure that they are educated in the system that is introduced.

[Dr Offord]

I must have left my speech on the photocopier, because once again, I have been anticipated. My hon. Friend is absolutely right; among those aged 22 to 29, participation has increased from 35% to 79% over the same period. That is certainly something we can all be pleased about. Automatic enrolment, which was also launched in 2012, has driven that increase and created millions of new savers, with nearly 10 million eligible employees having been automatically enrolled. Since April 2018, those savers are contributing at least 5% of their eligible income into their private pension pot, inclusive of employer contribution, and next year that will rise to 8%, including employer contributions.

In addition to those young people, it is worth mentioning the number of females who are now enrolled in pension schemes. Compared with the figure for 2012, an additional 3 million women now have a workplace pension thanks to auto-enrolment. As I said before, in the 22 to 29 age group, participation in the private sector has risen from 35% in 2012 to 79% in just five years. In total, the number of people who possess a workplace pension reached a record high of 41.1 million in 2017, up nearly 50% since 2012.

I ask the Minister to tell me in his summing-up speech whether he will provide not only me, but perhaps the House of Commons Library, with the auto-enrolment figures for all constituencies across the United Kingdom. I am particularly keen to see those figures for my Hendon constituents.

In conclusion, I believe pension freedoms have given people greater choice about when and how they use their pension savings. That is truly a transformation of our savings culture. The initiative displays true Conservative values of creating opportunity, nurturing aspiration and assisting people to take responsibility for their own futures. I hope the pensions dashboard is considered by other Ministers and inspires them to take similar actions in their own Departments.

[Joan Ryan (in the Chair)]

I will just say to the Back-Bench speakers that if they take about four or possibly five minutes and manage themselves, the Opposition Front-Bench speakers will have five minutes each and the Minister will have 10, and everybody should be able to get in.

--- Later in debate ---

[Dr Offord]

I thank all hon. Members who attended the debate, even though the House has adjourned.

The hon. Member for Strangford (Jim Shannon) spoke about saving from an early age, which is something I did with my first TSB account; the dashboard will encourage that. My hon. Friend the Member for East Renfrewshire (Paul Masterton) spoke about the £19 billion in lost pensions, which is a sum that could help many people across the country, if it could ever be identified who the money belonged to.

The hon. Member for Blaenau Gwent (Nick Smith) talked about the importance of there being clarity about providers, and the inclusion of the state pension, which is a good idea. My hon. Friend the Member for Clacton (Giles Watling) spoke about individuals being in control and the triple lock, which are both good things.

My hon. Friend the Member for North Warwickshire (Craig Tracey) raised the issue of the mid-life MOT; I would certainly like to see such an MOT for every decade. My hon. Friend the Member for Gloucester (Richard Graham) spoke about the pensions value accrued over his career, and the hon. Member for North Ayrshire and Arran (Patricia Gibson) spoke about the single dashboard provider. The inclusion of state pensions would be interesting, as I said.

The hon. Member for Birmingham, Erdington (Jack Dromey) brings great experience to the debate, particularly as a former trade unionist. He spoke about the achievements. Finally, I thank the Minister for all his work. He has made pensions interesting.