Leading automatic-enrolment pension provider calls for legal duty to be placed on pensions dashboards, as new report warns savers could be put at risk
The People’s Pension1 is calling for a legal duty to be placed on commercial pensions dashboards to put savers interests first, as a new report warns they could be put at risk without it.
As the government consults the industry on the next steps for the pensions dashboards project, Delivering pensions dashboards in the public interest, commissioned by The People’s Pension and written by consumer champion Dominic Lindley2 , emphasises the need for strong consumer protections when dashboards move from a single non-commercial version to multiple commercial ventures.
In the wake of the report, which sets out a long-term vision on how pensions dashboards can help people manage their finances more effectively, The People’s Pension is calling for a package of measures to ensure savers interests are put first.
These are:
A new legal duty, akin to a fiduciary duty, on dashboard operators to prioritise the interests of savers, overseen by The Pensions Regulator (TPR)3
Giving consumers the legal right to all their financial data, enabling individuals to see a total picture of their finances across pensions, banking, investments, and insurance
Pensions charges disclosed on the dashboard from day one to ensure full transparency
The government to create a statutory body to oversee pensions dashboards in the long-term, with the power to set standards and a clear statutory remit to act in the best interest of consumers
Commenting, Gregg McClymont, director of policy for The People’s Pension, said:
“Government figures suggest that a huge number of people, up to 18 million, could eventually access pensions dashboards. The opportunities are vast but so is the potential for consumer detriment.
“The Port Talbot steel worker’s pension scandal shows how easily things can go wrong. The strongest form of consumer protection is fiduciary law, so we’re calling on the Government to pass legislation to place such a legal duty on all dashboards operators.
“We’re also calling for pensions charges to be disclosed on dashboards from the outset, for consumers to have a clear legal right to all their financial data, and for the creation of a Pensions Dashboards Authority armed with a clear statutory remit to act in the best interest of consumers. This package of measures can strengthen the governance of pensions dashboards in the public’s interest.”
ENDS
Notes to Editors
- The People’s Pension is a leading, not-for-profit master trust (multi-employer pension scheme), provided by B&CE, with more than four million members from more than 80,000 employers across the UK, and £5bn assets under management (accurate at 28 January 2019). We tweet as @peoplespension.
- Dominic Lindley is an independent consultant specialising in financial services, consumer protection and conduct risk issues. He is a member of the Financial Services Consumer Panel and Director of Policy for New City Agenda, a thinktank and forum founded by Lord McFall, Lord Sharkey and David David MP.
- Statutory legal duties of this type, to act in the interests of pension scheme members already exist, notably in the 2005 investment regulations. The 2005 regulations specify that occupational pensions should be invested in the best interests of members and, in the case of a conflict of interest, in the sole interests of members. Most of the funded pensions assets (about 75 per cent) to be shown on the pensions dashboard are managed under this sort of regime. Only a minority of contract-based pensions are regulated under different arrangements. The 2005 investment regulations specify the assets must be invested—
(a) in the best interests of members and beneficiaries; and
(b) in the case of a potential conflict of interest, in the sole interest of members and beneficiaries.