I thank noble Lords for their contributions to this debate about the pensions guidance function. I shall begin by focusing my response on the questions around the state pension and shall then move on to the dashboard.
On Amendment 9, the noble Baroness, Lady Drake, and the noble Lord, Lord McKenzie, raised a question about information and guidance in relation to the state pension. It is, of course, vital that people have access to information about their state pension. Noble Lords will be aware that the Department for Work and Pensions is responsible for the policy and administration of the state pension. DWP offers a range of information and guidance through a variety of contact channels for people wanting to know about their state pension. The GOV.UK website is a key source of that information and guidance. It includes links which take people to the online services. For those who prefer to access information offline, DWP also provides leaflets, letters and other guidance on the state pension. All these forms of communication contain telephone numbers and the addresses of pension centres.
People seeking information about their state pension age or wanting a forecast of their state pension are able to contact DWP via telephone, textphone or email or, alternatively, they can write if they prefer. DWP also offers a digital service called “Check your State Pension” where customers can check a version of their state pension statement. Customers using this service can ask questions or raise queries by completing an online form. However, as with the current services, it is not appropriate for the body to become involved in specific issues relating to the detail or the handling by DWP of an individual’s state pension entitlement, for example, where a person has not received their
state pension. These are matters that only DWP can properly respond to. As it has access to national insurance contribution records, DWP is the right organisation to deal with state pension-related questions, information and guidance. It would be inappropriate to expect pension schemes or the financial services sector to fund guidance on the state pension.
The single financial guidance body will be able to provide general guidance on the state pension in same way as the existing services do now, for example, as general information on its website or as part of discussions with people. It will also direct people to the correct part of the GOV.UK website or provide the relevant telephone number or leaflet if a state pension query is raised during a face-to-face discussion, call or web chat or online inquiry. We expect the single financial guidance body to look for opportunities for a more seamless customer journey in the future as part of its programme of transformation across all its delivery functions.
I hope that I have clarified, in relation to state pensions, what the single financial guidance body can do and also the extensive service the DWP already provides to the public. Of course one of the key issues is the huge challenge which the noble Baroness, Lady Drake, referred to with reference to dashboards, and the same applies to the state pension in detail. The priority has to be around consumer protection safeguards, as she quite rightly said.
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On Amendment 10, I know that the noble Baroness, Lady Drake, has a great knowledge of pensions and also a keen interest in the excellent work done by the Pensions Advisory Service. Pensions and savings decisions are some of the most important a person will make during their lifetime. Pensions dashboards have the potential to unlock a huge amount of information that will help people make the best choices for them. The average person changes employers 11 times during their lifetime. They could have 11 or more private pensions by the time they retire. It therefore makes absolute sense that they should be able easily to view and understand their pension savings. The purpose of a dashboard is to provide a clear, online picture to an individual of all of their pensions savings in one place.
The Government were delighted with the excellent progress that was made by the pension providers that have worked together to make progress in the development of this important tool. Seventeen pension schemes and six technology firms, project managed by the ABI—the Association of British Insurers—successfully developed a working prototype of a dashboard in April this year. This proved that providing pensions information from different schemes in one place is feasible. The prototype indicated that the technology works, and this was a big first step forward in making pensions dashboards a reality.
However, it is still early days. For all the reasons that the noble Baronesses, Lady Drake and Lady Kramer, referred to—I would commend both their speeches to those who are actually developing this system—it is a huge and exciting task, but there is a huge governance challenge over who controls the dashboard, and the
range of information will be enormous. An issue of course at the forefront of all noble Lords’ minds at the moment is that of cybersecurity, and there will be so much information if we get this right and if it is to be able to provide a holistic service for pensions. It is early days, and a significant amount of work is needed to address the outstanding policy, technological and delivery questions before a consumer-facing dashboard could be rolled out.
I appreciate the purpose of the noble Baroness’s amendment and the careful wording she has chosen. I recognise that there may be a role for the single financial guidance body in this space in the future, not least in encouraging its customers to use these helpful tools. However, as I sense the noble Baroness appreciates, at such an early stage in the development of the policy to support the dashboard it is difficult to determine what will eventually be required to deliver consumer-facing dashboards. This includes what the role of the body might be in hosting a dashboard.
Nevertheless, I believe that the drafting of the pensions guidance function as it stands would be wide enough to cover a number of operational options, including hosting a dashboard, in which case specifying this as part of that function is therefore unnecessary. I make it clear here and now, so that it is clear in Hansard, that this will not require legislation: this legislation would allow for this. To legislate to support a pensions dashboard at such an early stage in the development of the pensions dashboard policy would be risky. We cannot at this stage determine what will eventually be required to deliver consumer-facing dashboards or what the role of the body may be in hosting a dashboard.
One question relates to the issue of trust. Trust is essential, and the Government have been clear today that there would have to be standards on data security and how basic dashboard data are presented and used. Whether it is right to lock down the dashboard to one single entity, as the noble Baroness has suggested, has to be balanced against the range of possible innovation that has the potential to help consumers. The ABI-led industry project is helpfully exploring some of the key issues through a number of work strands: consumer research, industry research, data standards—and I could go on. But the requirement function in terms of verification is, of course, hugely important in all this. I agree with the noble Baroness, Lady Drake, that protection and safeguards must take priority over and above technological capability.
In light of the explanations I have given, I very much hope the noble Baroness will not press her amendment and feel able to withdraw the amendment in the name of the noble Lord, Lord McKenzie.