Pensions Dashboard

Debate between Matthew Offord and Kirstene Hair

Wednesday 6th February 2019 Westminster Hall

[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.