Pension Schemes Bill

Baroness Coffey Excerpts

Monday 23rd February 2026 Grand Committee

[Baroness Griffin of Princethorpe (Lab)]

First, I welcome the Bill wholeheartedly. In this group of amendments, we have cross-party political working, which I am very proud of. Every child in the world deserves to breathe clean air.

I speak first to Amendment 212,

“fossil fuels and climate change risk”.

This new clause would require government and the FCA to make rules and regulations on climate risk grounds, restricting exposure of some occupational and workplace personal schemes to thermal coal investments, and to review whether the restrictions should be extended to other fossil fuel investments. I will not repeat what my friend, the noble Lord, Lord Sharkey, has said, but as noble Lords will recognise, this amendment does something that we have heard rather a lot about recently—taking powers to direct the investment of pension schemes—but in a narrowly defined way, with parliamentary and industry scrutiny, and with safeguards to prevent the power being misused.

In reality, the Government and Parliament, as noble Lords have said, have been directing pension scheme investments for decades. When the Brown Government established the automatic enrolment scheme, Nest, they set a policy of 0.3% annual charge, which forced even a very large scheme such as Nest to choose investments which fitted within that tightly constrained charging envelope. When the coalition introduced a charge cap on all schemes used for automatic enrolment, the 0.75% ceiling drove the smallest schemes to exit, moved smaller schemes into overwhelmingly passive investments and limited asset and private market allocations for all but the largest schemes. Theresa May’s Government legislated for trustees to publicly report their investment policies in relation to environmental, social and governance considerations—quite rightly so.

Each of these policies has been explained on the basis that they are in consumers’ and the wider public’s interest, as in Amendment 212 of the noble Lord, Lord Sharkey, to which I proudly added my name. The amendment is in the consumer’s interest, because the immediate power of direction in this amendment would be limited to thermal coal. Pension schemes do not routinely publish sector-level investment data, but early analysis suggests that schemes still invest somewhere around £30 billion in companies with thermal coal interests. While noble Lords have been talking about the long-term investment profile of social housing or infrastructure and its appropriateness for pension funds, this coal, as the noble Lord, Lord Sharkey, so clearly said, is an ultimate short-term investment. Even the International Energy Agency’s most pessimistic scenario shows that coal demand is peaking. These investments will fail in due course but, in the meantime, they do harm to the returns of other investments in their portfolios, as well as everybody else’s portfolios, by contributing to local air pollution and global climate change.

That is why ending these investments is in the wider public interest. The £30 billion UK pension fund investment in thermal coal supports the equivalent of about 10 gigawatts of thermal coal-fired power overseas. This, with some basic arithmetic, means that UK pension schemes’ thermal coal investment emits more greenhouse gases than the whole of the UK power network.

In this way, UK pension schemes have been undermining the progress made by successive UK Governments in phasing out coal, by contributing to fund the expansion of coal overseas. I do not intend that to be a criticism of the funds. Governments have not nudged them away from coal specifically, but they have been willing to nudge and direct in other areas, including in this Bill, and they should be willing to do so here in respect of thermal coal. I kindly request that my noble friend the Minister agrees to accept this gentle nudge.

I was pleased to add my name in support of Amendment 218A in the name of the noble Baroness, Lady Hayman. As she said, in response to a similar amendment on Report in the House of Commons, the Pensions Minister indicated that

“guidance will encapsulate those wider factors set out in his new clause … including what we mean by systemic risks and standards of living. There is good support in the industry for providing that clarity”.—[Official Report, Commons, 3/12/25; col. 1043.]

It is really positive that the Government have accepted the principle that bringing further clarity to fiduciary duties is needed to tackle confusion and uncertainty among trustees around how they should best carry out their responsibilities to deliver for members.

I am delighted that my union, UNISON—the largest in the UK with a membership of over 1.3 million—has written in support of this amendment. The amendment recognises that there are wide-ranging benefits in giving legal backing to pension managers who wish to act in their members’ best interests by considering long-term systemic considerations such as sustainability. Moving in the direction of refining investor duties to allow these types of systemic-level risks to be properly quantified and acted on will help future-proof the pension system in the long-term interest of savers. For those of us not yet at pensionable age in the UK, that is quite attractive.

However, issuing guidance is unlikely to provide the level of assurance required by trustees. That is because, as my noble friend knows, pension funds need only have regard to guidance, which does not represent a stable enough foundation for interpreting duties; nor does it insulate pension funds should they find themselves defending decisions in the courts. Without clear timeframes, trustees will be left unsure as to whether guidance could be changed in the future and how they should prepare for it. Leaving these matters solely to guidance risks perpetuating the current status quo, where trustees feel they do not have permission to act in response to system-level risks for savers. Accepting this amendment would, I hope, bridge the gap between the Government’s commitment to date and their objective of removing obstacles for pension managers. I hope that my noble friend will accept it.

[Baroness Coffey (Con)]

My Lords, I have tabled Amendment 218E, which is about recognising biodiversity risk. In the previous Pension Schemes Act, we introduced additions to the 1995 Act to allow regulations to come forward regarding climate change. The significant difference between that and Amendment 212 is that it in no way mandated an approach to investment but recognised the risk that would be there. We have brought together a well-established architecture, with the TCFD, the Task Force on Climate-related Financial Disclosures, and now the TNFD, the Taskforce on Nature-related Financial Disclosures. I pay tribute to David Craig for the immense work that he has done throughout all this. I think I am right in saying that well over 700 investors around the world, with approximately £22 trillion-worth of assets, are committed to start using the TNFD once we have the proper hierarchy agreed. Being positive about it is not unique to this country; we are seeing that around the world.

One of the reasons why I decided to table this amendment now is because, while I appreciate that it has taken time to get to where we are, I do not know when next there will be a pension schemes Bill. Let us hope that there will not be one for a while, because we know that the industry needs stability.

These are serious risks, as was highlighted in the Chamber today when the noble Baroness, Lady Hayman of Ullock, answered my noble friend’s question about the TNFD and the UK’s nature security assessment. It is not just about environmental risk—it has been made very clear by the Government that we need to think about that in the long term—it is also about a balance between food security and geopolitical security. I accept that not all of those are issues that we should use our pension assets and schemes around the world to try to manage. That is not their role, but it is their role to think about the return on investment and what instability might do to pensioners’ projected payments in the future.

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Our concern with the amendment specifically is that it risks duplication, fragmentation and legal uncertainty. Climate and biodiversity are clearly tightly interlinked.

[Baroness Coffey (Con)]

I have been listening carefully to the Minister. She will be aware that this is a replication of what happened in a previous Bill. The two issues that she raises are not identical, although there may be some interlinking in certain ways. I am slightly concerned at the suggestion earlier that more primary legislation is not needed.

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Moved by

[Baroness Coffey]

218D: After Clause 117, insert the following new Clause—
“Pensions dashboards(1) Within six months of the day on which this Act is passed, the Financial Conduct Authority must make rules to enable private sector pension dashboards to receive data and operate.(2) In the Pensions Dashboards Regulations 2022 (S.I. 2022/1220), in Regulation 4, omit paragraph (3).”Member’s explanatory statement
This probing amendment seeks to require the Financial Conduct Authority to open up data to private sector-run pension dashboards within six months. It also repeals the requirement for the Secretary of State to give notice specifying the “Dashboards Available Point” at least six months in advance of that point.

[Baroness Coffey (Con)]

My Lords, it is a pleasure to speak to the Committee about pensions dashboards.

I am conscious that this has been quite a long journey in terms of trying to get the pensions dashboard in the Pension Schemes Act 2021 initiated. I am aware that, at the time, the House of Lords was keen that there should not be a private dashboard, but the House of Commons gave its strong view. As a consequence, the Bill went through without specifying that DWP and MaPS had to produce a public sector pension dashboard first because we were concerned—I am still concerned—that the longer people do not know what is going on with their pensions, the shorter the time they may have to make informed choices or, at least, to consider and understand what their pension and retirement will look like in future. That is why I have tabled this amendment.

Two things come out of that. One is that, in essence, what is required is for the Financial Conduct Authority to sort out all the different bits in order to allow private sector pension dashboards to get the necessary data and to be allowed to start operating. Indeed, Pensions Dashboards Regulations that were passed a couple of years ago were amended to remove the dashboard’s available point.

Let me go on a slight journey; I do not intend to delay the Committee for very long, but I am really concerned about progress. I am aware of the reset that happened and the issues around what triggered it, which I do not think are public, but we are nevertheless in a situation where we should be making more progress than we are. It is notable that, in a Written Ministerial Statement in October 2024, the then Pensions Minister, Emma Reynolds, changed the Government’s policy from what had been the case; in effect, it had been neutral on what was happening around trying to get these dashboards going. She put in place a policy, which is still live in government today, saying that we must make sure that the DWP/MaPs dashboard comes out first and is well tested, and then we will start. We are still committed to doing the private sector-run dashboards but not to any particular date.

I am grateful to the Minister for putting on a recent briefing and to the chief executive of MaPS and the team coming to do that, but I have to say that I was somewhat alarmed that it still feels as if we are a long way off. I appreciate the connection deadline has not changed. It was great in a recent parliamentary Answer to see the progress of data provided, but it started to get me concerned about exactly the issues I considered several years ago: that once we get into MaPS and DWP starting to decide what are the best ways to do some of this communication and what user testing works well, they end up missing out on the opportunity of what the private sector does every day in terms of clear communication. That does not mean to say we are looking for a cowboy scheme—far from it as there is still the Financial Conduct Authority—but that we make more rapid progress than is happening now.

I know some of the pensions schemes people are happy to no longer have the six months. I know from the latest update from the programme board as part of the advisory group in December 2025 that despite acknowledging that the Government were clear that there would not be a private sector dashboard allowed anywhere near to the launch date of the public sector dashboard its number one issue was trying to make sure that that was available as quickly as possible.

I am conscious of things that seem to go awry. There had been amber ratings for a while, then, all of a sudden, there was a red rating on the pensions dashboard. Nevertheless, we are still making slow progress, and I feel that we should open this opportunity to make sure we have pension dashboards available as quickly as possible. With the best will in the world, MaPS is not moving quickly enough. I do not believe we will have a MaPS/DWP dashboard until some time in 2027.

The original intention when MaPS took this over— in 2023 I think—was that the connections would be completed by then. I fully understand the history on that. This is the opportunity to get on with this. We have spent a lot of time in this Bill saying we want to make sure people have better returns and better understanding of what is happening with their money in different ways. For me, the dashboards are a key part of that, and at the moment, it feels that while the Government have not deliberately decided to go slowly, we are going slowly as a consequence of their policy choices. It is vital that members of pension schemes know their situation so they can make the necessary choices.

I am sure the Government recognise that they did not communicate all the way back in 2005 and then were found to have caused maladministration in terms of the WASPI women as a consequence. We are not getting into a debate on compensation or something like that, but it is important we let people know as soon as possible, and that is why I have tabled this amendment today. I beg to move.

[Lord Davies of Brixton (Lab)]

I urge the Minister in her reply to stress the need for caution in this area. I am afraid I understand what the noble Baroness, Lady Coffey, is saying: we do seem to have been waiting a long time for the dashboard. However, I have always had questions about the private sector dashboard, and I think they can be answered only as and when the MaPS dashboard is up and running. The problem at heart—and it may be a caricature—is about the point of a private sector dashboard. It could all too easily be a way of getting hold of data. It is the old saying that you are not the customer, you are the product. That is the fear with the private sector dashboard, which is why we have to get the public sector dashboard up and working. We know what the issues are. It may be necessary to have private sector dashboards, but I am still not totally convinced.

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[Baroness Sherlock (Lab)]

I am grateful to the noble Baroness, Lady Coffey, for introducing her Amendment 218D and drawing attention to pensions dashboards. The Government recognise the important role pensions dashboards will play in increasing people’s engagement with their pensions, and we note the purpose behind the amendment. Obviously in practice it would require the FCA to make rules within six months of the Bill receiving Royal Assent to enable private sector pension dashboards to receive data and operate. It would also repeal the requirement for the Secretary of State to give notice specifying the dashboards’ available point at least six months in advance of that point.

I know that many noble Lords here are supporters of pensions dashboards and are keen that they are launched as soon as possible, so it has been good to be able to update noble Lords on the progress that has been made. I know some noble Lords were able to come to the presentation, but for those who were not, I just say that over 700 of the largest pension providers and schemes are now connected to the dashboards ecosystem, and over 60 million records are now integrated into dashboards. That represents around three-quarters of the records in scope. The state pension has now connected, adding tens of millions of state pension records.

My noble friend Lord Davies is right to say that we need to get this right. It is important that pension dashboards are launched only when they are safe, are secure and have been properly user tested. When noble Lords attended the demonstration, they could see that pensions dashboards provide a great opportunity for consumers. In order to realise that opportunity fully, we need to make sure that the service offers them a positive experience and meets their needs. Consumers need to be able to understand the information a pensions dashboard is showing them and the limitations of that information. They need to be supported by broader pensions guidance to help them with any potential actions after viewing their information. User testing is key to getting this right.

I am pleased to be able to advise the Committee that user testing of the MoneyHelper Pensions Dashboard is under way. Low-volume testing began last year and will ramp up during the course of this year. Only once we have confidence from this testing that the service is ready for widespread public use will the Secretary of State give six months’ notice for launch. The Government have previously confirmed that the delivery of the MoneyHelper Pensions Dashboard will be prioritised, to be followed at a later date by the launch of private sector dashboards. That will allow the launch of private sector dashboards to be informed by learning from the launch of the MoneyHelper Pensions Dashboard—for example, on volumes of users.

The noble Baroness, Lady Coffey, is more or less saying, “Why is it taking so long and what has happened?” She is right that there was a reset between March 2023 and March 2024 and the programme is currently rated amber, but the fact is that delivering pensions dashboards is a very complex task. The digital architecture will facilitate the search of millions of pension records held by thousands of pension schemes and providers, each with a different IT system and different ways of calculating values. It is important we get it right. Dashboards have to be safe and secure and must meet the need of consumers before they are launched. While the scale of the task of making dashboards a reality is huge, the fact is that delivery partners are making good progress. The pensions dashboard programme is confident that schemes and providers in scope will be able to connect by the regulatory deadline on 31 October 2026.

In terms of private sector dashboards, I can reassure the noble Baroness, Lady Coffey, that the Government are fully committed to delivering private sector dashboards and that MaPS is working closely with potential dashboard providers, the DWP and regulators on a pathway for their development and implementation. The FCA has already consulted on and finalised the rules that will apply to dashboard providers after they are authorised and connected to the live environment. MaPS is also engaging actively with the industry and launched a call for input in January this year seeking feedback on how best to support the delivery of private sector dashboards. While the Government recognise the innovation that private sector dashboards will bring to the industry, the date for the dashboards’ available point cannot be specified at this stage. The decision to launch private sector dashboards must be subject to many factors, including securing a sufficient level of coverage, being assured of the safety, security and reliability of the service and testing the user experience.

The noble Viscount asked whether we can confirm a date. It is too early to confirm a launch date because it is vital that the foundation on which dashboards are built, the whole ecosystem, is safe and secure and works for both the pensions industry and individuals.

Once the service is secure, operationally reliable and thoroughly user tested, the Secretary of State will provide six months’ notice ahead of the launch of the MoneyHelper Pensions Dashboard for public use. The requirement to provide six months’ notice in each case through the dashboards available point is intended to provide the pensions industry with notice to provide for the launch of private sector dashboards, which will help support a positive user experience.

I understand that noble Lords want to get this done quickly, but I would say two things. Pursuing speed at the expense of security and user experience would be a mistake, one that Governments have learned over the years. We need to get this right. Secondly, the noble Baroness, Lady Coffey, wants something out there as soon as possible—so do I. Prioritising the public sector dashboard is the fastest way to get something out there. We are pursuing that. We all want this to be done as soon as possible, but we can do it only when we are confident it can be secure and meet users’ needs. I hope that is enough reassurance for her to withdraw her amendment.

[Baroness Coffey (Con)]

Of course I will withdraw the amendment, but I do not want to give the Minister any suggestion that I have any assurance from what I saw at that briefing, in terms of user testing. I do not want to go into detail, because that is not relevant for this Committee, and I am more than happy to meet to discuss.

What I will say is that it is clearly making certain amounts of progress, technically. But I am concerned about aspects of the user testing, which were laid out to us, because that is what is taking very long. This is something that the Government and MaPS are not very good at. I have plenty of experience of that from my time running DWP, in terms of aspects of its communications, particularly on something technical such as this. That is why I am concerned, and why I brought this to the attention of the Committee today. That said, I seek leave to withdraw the amendment.

Amendment 218D withdrawn.