Pensions minister Guy Opperman has succeeded in throwing out a Lords amendment to exclude all financial transactions from the pensions dashboard, saying it would have caused restrictions and problems in the future.
At the Pension Schemes Bill committee hearing yesterday (November 3), Mr Opperman’s amendment to include financial transactions from taking place on a pension dashboard was approved by nine votes to seven.
Mr Opperman said the original amendment, brought by Labour peer Baroness Drake, to ensure any dashboard service would not go beyond finding and displaying information and would not allow financial transactions to take place was “utterly illogical”.
He told the Commons if the Lords amendment was accepted any financial transactions, including pensions consolidation, would not be able to take place in the future until primary legislation had been passed.
Mr Opperman said: “Obviously, while pension bills are like buses—we wait for ages for one to come along and then do two in a month—I do not anticipate one coming along in a great hurry, though I hope there is another one before the close of this Parliament.
“However, we definitely assume that this would cover consolidation of pots, transfers between providers, and potentially the raising or lowering of one’s contributions to an individual pension.
“In those circumstances, it would be utterly illogical, given all the other comments that we are making about the desirability of such an approach, to rule out financial transactions.”
He criticised the Lords for not making it clear what activities would be considered as financial transactions.
Mr Opperman said if he were to allow Baroness Drake’s amendment it would “restrict the capability of the dashboard massively in the future” and stated this was not something he was prepared to do.
The peer had tabled the amendment to stop savers being targeted by fraudsters and losing all their savings.
But Conservative MP Rob Roberts agreed with the pensions minister, saying government should not restrict savers’ ability to handle their pensions.
He said: “Financial transactions could be to increase or decrease a contribution level or make a one-off lump sum payment. How empowering it would be for the consumer to be able to do that and look, in real time, at the impact of those changes on the end result.”
Mr Roberts also rebuffed claims from other MPs that savers in defined benefit schemes may lose their benefits.
He added: “Talk about people losing the safeguards around DB schemes or being moved into DC are wildly off the mark. That cannot be done now, so why on earth would anyone be able to do it just because we change from paper transactions to making transactions through the dashboard?
“We do not allow it now; why would we allow it in future? It is a ludicrous and scaremongering suggestion, and I do not like it.”
Meanwhile, other MPs urged Mr Opperman to consider the scam risk which could arise from allowing transactions on dashboards.