My Lords, the introduction of a pension dashboard service raises major considerations of the public good and consumer interest, which is why I, my noble friend Lady Sherlock and many other noble Lords across the House have argued strongly for citizens to have the right to access their data through a public dashboard and not be restricted to commercial services.
I thank the Minister for his courteous consideration of our arguments and the decision of the Government to require the Money and Pensions Service—MaPS, a public body—to provide a pension dashboard service. Amendment 63 would ensure that the MaPS public dashboard must have been in operation for a year, and the Secretary of State must lay a report before Parliament on the operation of that service, before commercial dashboards are authorised by the FCA to enter the market. A MaPS dashboard would be part of their function to deliver guidance to the public that is free at the point of use—a safe space, unfettered by any commercial interests.
As the Government can mandate all pension providers and schemes to release personal financial data on the order of 22 or more million people, Parliament needs to be confident that the public good and consumer interest are well served. The points of the noble Lord, Lord Young of Cookham, are extremely valuable and important, and I thank him for making them. Financial technology should be harnessed for the public good and to improve financial markets, and the dashboard has that potential.
However, building a dashboard service has complexities and challenges. The architecture, the liability model, consumer redress on detriment, data standards and sharing risks, identity verification and security—that quite rightly preoccupied the noble Lord, Lord Young—delegated access and consumer behavioural responses, to name just a few, are all work in progress. As I observed in the previous debate:
“The long-term savings market is particularly vulnerable to consumer detriment”.—[Official Report, 26/2/20; col. 176GC]
There is a major governance challenge to be addressed: the consumer protection of millions in both the provision of the dashboard and the infrastructure that supports it.
The ABI, speaking for some commercial providers, has acknowledged the need for strong governance to make clear what obligations, liabilities and controls will be in place and are necessary. In requiring near-universal coverage, the dashboard service raises the bar on protecting customers from poor behaviour by regulated and unregulated providers, scammers and consumers’ own vulnerability, when all their savings can be viewed in one place.
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Better information facilitates, but does not automatically translate into more engagement or better decision-making. Similarly, with the presentation of data, individuals reveal powerful behavioural biases; depending on how it is presented, data can nudge people
towards decisions that are not in their best interests. Public policy on the dashboard has to complement the Government’s overall strategy to support savers. There is a need to understand the behavioural responses of consumers and how access to guidance and data presentation can improve decision-making. As I have said before, poor decisions on pensions are mostly irreversible and can be financially life-changing.
Delivering a successful dashboard also involves consideration of the activities and policies that come off the back of that dashboard. Engagement is important, but the evidence consistently reveals that defaults are the most powerful drivers of behaviour and good outcomes. Greater knowledge of people’s saving should encourage more fit-for-purpose glide paths and default products in a manner that puts consumers’ consent and interests first. It will be important to understand how the dashboard contributes beneficially to consolidating small savings pots and liberating funds from poor-value products.
There are those who argue that the complexities are overconsidered, but significant others who are deeply engaged in providing pensions take a different view. The Nest pensions trust, with over 8 million members, argues that the Government’s focus should be on the creation of a public dashboard with strong governance and consumer protection applied. The Pensions and Lifetime Savings Association, so often quoted in support of the Government’s arguments, takes the view that the Government should begin with the first dashboard as a single non-commercial dashboard to ensure that the level and quality of consumer protection is fit for purpose. Which? commented that the Bill
“should enable the best possible dashboards to be created in the shortest possible time, starting with a Government-backed pensions dashboard.”
I have set out some of the important issues. We do not yet know all the answers, and the behavioural responses have yet to be seen. This amendment does not oppose commercial dashboards, but it seeks one year of experience with the MaPS public dashboard and a report to Parliament for the authorisation of commercial dashboard services in the market. The Minister will no doubt argue that there will be plenty of testing and trialling before public and commercial dashboards are simultaneously launched, and that this amendment is unnecessary. But there are sufficient examples in the real world, public and private, where live operation reveals fault lines and unanticipated consequences.
Given the issues of public good and consumer interest in play here, this amendment asks no more than that the Government, in exercising their duty of care to what will be millions of consumers, ensure that the MaPS service is up and running for a year before commercial dashboards enter the market, and that the Secretary of State has reported to Parliament. I hope that the Minister will accept the amendment. If not, I intend to push it to a vote.