On the go: Peers in the House of Lords have shown their support for the exclusion of all financial transactions, such as the transfer of assets, from the pensions dashboard in order to protect savers from scams.
Peers debated amendments made to the pension schemes bill in the House of Lords on Tuesday afternoon, with the majority showing support to a clause which will force dashboards to purely display information on a saver’s pension for the time being.
The amendment, brought by Labour peer Jeannie Drake, will ensure that any dashboard service will not go beyond finding and displaying information on a consumer’s savings, and should not allow financial transactions to take place through the dashboard before Parliament has had the opportunity to consider the matter and approve this through primary legislation.
Baroness Drake said this move was important to stop savers being targeted by fraudsters and losing all their lifetime savings.
She said: “The impact of scams, mis-selling, provider nudging and poor decision-making could increase if an individual’s total savings are displayed in one place, the dashboard allows financial transactions, and the wrap of consumer protection is not fit for purpose."
“For some vulnerable customers, poor decisions could be more costly if the impact is across all their savings, and if people are scammed, they could be scammed out of everything,” she added.
Before any financial transactions are allowed to take place, Parliament first needs to understand how the dashboard is driving behaviours, of both consumer and provider, and how consumers will be protected, Baroness Drake argued.
Conservative peer Ros Altmann also backed this amendment saying that there would be “significant dangers should there be an easy transaction button on a pensions dashboard right from day one”.
Meanwhile, Lord Vaux said dashboards do not diminish the need for people to seek advice when making decisions on their pensions.
The Lords also passed an amendment blocking commercial companies from operating dashboards until a publicly-run service, launched by the Money and Pensions Service, has been running for at least a year.
Baroness Altmann said: “There has to be significant concern that, once a dashboard is up and running, we will need to learn lessons before further activity takes place.
“If we have a public service dashboard for a minimum of a year, we will have chances to learn lessons that otherwise might not be learned—particularly in light of such issues as data concerns, types of protected benefits and requirements for Maps guidance.”
She added: “This is an important issue. I therefore hope that the government will recognise the necessity of ensuring that private dashboards do not start before the public dashboard has been tried, tested and reported upon in Parliament.”
The Pensions Schemes Bill will now have its third reading in the House of Lords before being passed to the House of Commons.
This article originally appeared on ftadviser.com
