I am grateful to the Minister. That document came out on my birthday, so it was a very happy present in some ways. When we read it, however, we have to remember that the process the FCA went through was with some of the largest, most reputable and most capable pension schemes, and even then it got only an 11% increase from the derisory 3% to a 14% take-up. It is not clear to me that, when trying to roll that out over the whole
sector, we could even get that high if we were relying on smaller pension schemes or those that did not have the same resources. I hope the Minister will accept that we want to set a target that is much higher than 14%. Whether it needs to be 50% or some other figure is something that we could work on. Perhaps he could tell us in his closing remarks whether he agrees that the Government should set the FCA a much higher target. Would he at least accept the principle that, if we cannot get there by his preferred route of a nudge, we would have to look again at some kind of default system? Perhaps he will come back to that when he wraps up the debate.
One argument that is often used on this issue is that a lot more appointments would cost a lot more and that the levy would therefore go up. Yes, but I think that when we created this structure, we assumed there would be a lot more appointments and that the costs would be a lot higher. The benefits of a retiring person not making a catastrophic mistake with their 40 years’ lifetime savings outweigh the relatively small cost per person of providing the guidance. I know the Minister is very keen, as I would be, on the idea of a midlife MOT, but I do not think that that should replace this proposal. Giving someone a session in the middle of their working life, so that they know what their financial position is and what they can do about it, is not the same as giving someone help as they are about to start decumulating their pension so that they understand their options at that very important time. I am not sure that, if we told most people at the age of 45 what their options would be when they retired at 68, they would still have them in mind when they came to make those decisions. Pension Wise is not a substitute for a midlife MOT. We should have them both, and they should be as widely used as possible.
I personally would prefer a default guidance appointment, with someone having to sign in blood if they really did not want this free, excellent quality guidance before they could access their money. If the Government are not proposing that, I propose the compromise of setting a much higher target and if we cannot get there any other way, we will come back to this yet again.
The other amendments that I have signed cover scam prevention, which I think the Chair of the Select Committee and the Minister have dealt with pretty well. I accept there has to be a balance. If we have freedom of choice, people have to be free to do what they want with their own savings, and if some of the things they choose to do are ill advised or crazy, that is their choice. However, I want them to be able to make an informed choice so that they know the risks of what they are doing and will not be tricked by a heavy sell from a scam provider who is selling something totally unsuitable for someone of that level of means.
It must be right that when trustees have evidence or suspect that what they are being asked to do is clearly not in the best interests of the saver, they can refuse to make the transfer if those red flags appear. If there is other evidence that it just looks to be a rather stupid idea, they should at least be able to slow down the transaction, perhaps delaying it by a month. Perhaps they could refuse to do it unless the person took Pension Wise guidance, or at any rate find some way of slowing it down. One of the things that scammers need is momentum—they rush people into making a decision. The more we can build in delay, the more chance a
person has to think again, take better advice, discuss it with a member of their family, take Pension Wise guidance and not want to go ahead with the aggressive step that has been proposed to them. The Minister has come up with a way forward that does not need primary legislation, so I am glad that we are bringing the amendments forward only as probing amendments.
6 pm
I turn to new clause 6 and the regulation of superfunds. I think I said on Second Reading that it is not often that Opposition and Back-Bench Members ask the Government to take more powers in a Bill. I make no criticism but it is slightly strange to legislate to require the Government to legislate on a future date. But I accept that the Opposition are trying to do the right thing. As the regulator has said that we need legislation for superfunds, I hope the Minister can assure us that we will be able to find time, as and when the legislation has been drafted, to get it through and we will not be stuck in a horrible situation of superfunds existing, gradually increasing market share, some things happening that we would rather were not happening, and then not being able to stop those because we do not have parliamentary time. With that reassurance, I would not need to consider supporting the new clause.
Various amendments on the dashboards have been tabled. My vision for dashboards has always been that we need as many dashboards out there as we can have so that people can see their pension saving status in whatever financial app they choose to use. I therefore would not support amendments that seek to restrict this to only one dashboard, even for a period of time. I do not support the idea of a dashboard being a two-way process: it would not only suck data in and inform you, but you could, on the tube home after a few beers on a Friday night, accidently transfer all your pension into something you will regret. So I do not support there generally being transaction capability.
I have a concern with amendment 15. If my existing pension scheme had a dashboard where I could check all my pension savings and I thought, “Oh God, they are much lower than I thought. I would like to increase my monthly contribution with my existing pension provider,” that would be a sensible transaction for me to start to make from the pensions dashboard. That is different from being able, via one click of a button, accidently to transfer all my pensions from one provider using that system. I therefore cannot support the wording of the amendment because it may go a little bit far. But I support the spirit of it.
I turn to amendment 16 and the Paris climate change agreement stuff. There is a real danger, if we are not careful, that we will put trustees in an invidious position. They rightly have a legal duty to act in the best interests of their members, and that duty is to get those members the best possible pension. If we put them under a second legal duty that would restrict where they could invest the pension scheme’s money, that may end up with lower returns. I assume that if Paris climate change agreement-friendly investments gave a higher return, they would choose them already, so there must be a reason why they would not want to do that.
We would be giving trustees a horrible dilemma: do they comply with the rule to get the best pension for their members, or the rule to get the most climate-friendly one? That would put them in an impossible position
and, sadly, it would probably be bad for savers. I think we need to approach that matter in a different way from that proposed in amendment 16. I support the spirit—