My Lords, the intent of Amendment 4 is to require that the introduction of a pensions dashboard shall be as a single, public service dashboard overseen and hosted by the single financial guidance body, a safe viewing space where an individual can see all the information on their state and other pensions savings. I welcome the Government’s recent statement that the Department for Work and Pensions is to take ownership of the dashboard project and take it forward to the next phase. Releasing data on individuals’ state pension entitlement to the dashboard is a key criterion for its success. The DWP being now responsible for the database of state pension entitlements and taking ownership of the project is in itself reassuring, because the department could never allow release of this personal state data through the dashboard unless it was completely satisfied with the governance, standards and protection of individuals.
The industry has done a good job in driving the dashboard project forward and the recent report on the project from the ABI asserts,
“that it is possible to build the ‘plumbing’ to connect multiple pension schemes to dashboards and for people to see their pensions in one place … infrastructure can be delivered, and a data standard for sharing information can be agreed … industry can work successfully with FinTech providers to make this happen”.
That is good and it has done good work, but the project now needs to move into a new phase, owned and driven forward by the Government, engaging a wide body of stakeholders, including, importantly, consumer groups. The public need to see clear proof of concept from the perspective of the consumer’s interest and the public good.
Within the dashboard there will be a pension finder service: the engine that sends out messages to search the records of all providers and schemes records to see if there is a match to the customer details. The engine then collects that data to populate the consumer’s front-end viewing space. If introduced, the data of millions of people will be accessible through the dashboard—high standards, tough regulation and sound governance will be required. To be successful, a dashboard requires all providers to release their data, but there are some big and significant questions still to be answered on government, implementation and consumer protection before the Government can move to compel all providers to provide their data, which the industry is calling for.
There is a major governance challenge to be addressed: the consumer protection of millions of people in both the provision of the dashboard and the infrastructure that supports it. Issues such as identify validation and security, data matching and pension-finding consent need to be overseen and policed.
The ABI report acknowledges,
“the need for strong governance to make clear what obligations, liabilities and controls are in place … to oversee the setup and maintenance”,
of the dashboard. Under what circumstances should individuals’ data be shared with third parties? What will be the requirements around consent and protection? What happens if those parties are not regulated? Certainly, any unregulated party must be excluded from using dashboard data. After all, the consumer will be giving permission for the use of their personal data to search for pension savings, and for the provider or scheme to share that data with the dashboard.
The dashboard, in requiring near-universal coverage, raises the governance bar on protecting consumers from bad behaviour by both regulated and unregulated providers, scammers and consumers’ own vulnerability when all their pensions and savings data can be identified and viewed in one place, accessible through a digital identity. Oversight of that governance must rest with a public body with the right powers to work with regulators and industry to deliver what is required.
The potential scale of the dashboard raises the importance of public control over its implementation and rollout. There will be the constraint of the minimum viable product, but a staged implementation approach to full coverage will reduce the risk to the consumer. I recognise the dashboard is only as useful as the data that populates it, so a pathway to full coverage is needed for its success, but that needs public control.
The Government need to give clarity on the consumer benefits and public policy outcomes that a pension dash- board is expected to deliver. Any decisions on the project must be benchmarked against these desired benefits and outcomes. The dashboard may provide people with the information they need to consider their options but, of itself, it will not enable them to make informed decisions. It is important that support structures exist around the dashboard to avoid people making poor decisions with the information they have accessed.
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Public policy on this project has to complement government’s overall strategy to support and protect savers. A dashboard can contribute but does not provide the solution to the problem of the need for better and more informed decisions when people access their savings. It will not be a silver bullet for customer engagement. International experience indicates that more people are likely to use the dashboard if it is part of a wider approach to promoting pensions. Delivering a successful dashboard involves not only the governance and implementation challenges but consideration of the activities and policies that come off the back of that dashboard. The engagement of individuals is important, but the evidence consistently reveals that defaults are the most powerful drivers of behaviour and good outcomes. The use of glide paths and default products is likely to develop even further in future. Greater knowledge of people’s savings portfolios could allow for the design of more fit-for-purpose defaults, but this all needs to be in a world of consumers’ consent and interest being put first.
A dashboard can make pensions guidance more effective as individuals would have greater knowledge which would improve that guidance conversation with less time spent on working out what people have and more on giving the quality guidance that people need. The quality of data and record-keeping across providers is not always good. A person moving jobs may have up to 11 small pension pots, but perhaps only one provider has up-to-date details about them. Government policy need to be clear on if and how use of the dashboard can measurably reduce the small pots problem and improve the position of savers whose funds are sitting in poor-value legacy products.
All these issues reinforce the case for a non-commercial single public service dashboard that will engender
trust and confidence from the public. Consumers need a safe space to view their savings and pensions where they will not be aggressively marketed to and are safe from scams and being lured into poor decisions. Unless people believe the dashboard is a trusted and protected space, they will not use it. Consumer research reveals an anticipation or implicit assumption that the dashboard will be run by a government-backed service which people can trust because of the expectation that the Government would not use personal data for commercial gain. The research evidence in the ABI’s report confirms that consumers want a centrally accessible dashboard that is free from commercial pressures and is sponsored by the Government. There are real risks for the Government if they compel providers and administrators to release data to other than a public service dashboard. The oversight and hosting of a public-good dashboard, its implementation and the responsibility for provisioning and governing the pension-finder service needs to be rooted in a public service body that is not trying to sell products and services. There needs to be a clear demarcation between information and sales.
In Committee, the Minister confirmed that such a public service role, if agreed by the Government, falls within the objectives set for the single financial guidance body in the Bill. The public governing entity would work alongside the regulators, government and industry to ensure that all the necessary controls and protections were in place. I beg to move.