Pension Schemes Bill (Eighth sitting)

David Pinto-Duschinsky Excerpts

Committee stage
Thursday 11th September 2025 Public Bill Committees

[The Chair]

I remind the Committee that with this we are discussing the following:

New clause 40—Targeted Advice Access for Under-Saving Cohorts—

“(1) The Secretary of State must make regulations to provide enhanced access to pension advice or guidance for cohorts identified as under-saving for retirement.

(2) Regulations may make provision for—

(a) identifying under-saving groups, including but not limited to—

(i) women,

(ii) ethnic minority groups, and

(iii) others affected by long-term pay or pension gaps;

(b) mechanisms to fund and deliver targeted support;

(c) reporting and evaluation requirements to assess take-up and effectiveness.

(3) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”

This new clause allows for the creation of targeted pension advice or guidance interventions for groups at risk of under-saving for retirement.

New clause 41—Cap on cost of advice for pension holders—

“(1) The Secretary of State may by regulations introduce a cap on the cost recoverable for providing pension advice per pension holder under any scheme operating free or subsidised advice.

(2) The cap may vary depending on—

(a) the value of the pension pot;

(b) the type of pension scheme;

(c) the complexity of advice required.

(3) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”

This new clause enables the introduction of a cost ceiling for advice provision to members of pension schemes.

New clause 43—Auto-Enrolment into Pension Wise Guidance Sessions—

“(1) The Secretary of State must make regulations requiring that individuals reaching prescribed ages are auto-enrolled into Pension Wise guidance appointments.

(2) The regulations may provide for—

(a) opt-out procedures;

(b) the prescribed ages or pension milestones at which auto-enrolment occurs;

(c) the means by which schemes notify members and facilitate appointments.

(3) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”

This new clause aims to increase engagement with Pension Wise by auto-enrolling members into guidance sessions at key decision points, with the ability to opt out.

[David Pinto-Duschinsky (Hendon) (Lab)]

After hearing the untrammelled cynicism of the Opposition, I thought there would be nothing better than to bring some fresh-faced optimism to the debate. I am very grateful to be called, Ms Lewell. I have a couple of brief points to make.

As we heard in the interventions made just before the break, there is unanimity on the need to tackle the incredibly important issue of advice. As the shadow Minister pointed out, levels of advice to pension holders have collapsed, which has profound consequences, particularly for those who need help the most. There is real consensus on the need to address this issue, and the Government are making huge strides to do so, whether that be the introduction of the dashboard or the now renamed Money Wise. As the hon. Member for Horsham mentioned, the Work and Pensions Committee has also looked at this issue, the lesson from which is that this is a horses for courses problem—a complex problem that requires complex, nuanced and sophisticated solutions that target different types of group and use different approaches. That lies at the heart of why I am asking some questions about the new clause.

First, exactly because what we need is a quite sophisticated, multi-pronged and varied policy response, using a quite basic, one-size-fits-all response in statute feels like the wrong way to address the problem. Secondly, as the shadow Minister highlighted, I am somewhat worried about the law of unintended consequences. There is the simple issue of cost. My quick consultation of Google suggests that 378,000 people turn 40 each year and the most basic advice normally costs several thousand pounds, so the bill will not be insubstantial. We may have had a conversation earlier about that, but how the cost might be covered has not really been addressed.

As important is the broader question of capacity. The shadow Minister made an excellent point about how the capacity for retail advice was changed unintentionally by a well-meant measure. If we start looking at what capacity would be needed to offer even a basic standard of advice to over 300,000 more people each year than we are seeing now, we begin to see a problem. We need to do a lot more work on modelling how that advice would actually be provided, what the market would look like and what the second-order effects would be.

[John Grady (Glasgow East) (Lab)]

My hon. Friend makes a very good point, at the heart of which is the question of what work needs to be done to introduce anything along these lines. One would have to look at what the Financial Conduct Authority is doing, the existing service provisions, the costs, and how we smooth out implementation. There are a lot of practical issues with implementing something like this, are there not?

[David Pinto-Duschinsky]

As ever, my hon. Friend is absolutely right and his intervention goes to a third point: this also feels a bit premature.

As my hon. Friend mentioned, we are in the midst of the incredibly important advice and guidance boundary review. For many of the groups that we want to help, advice might not actually be the right solution, but guidance might be, and we are in the midst of re-tooling that. Similarly, we are in the midst of rolling out dashboards, which will transform the landscape but not fix the problems on their own; we may need to layer new policy initiatives on top. It seems that we are at risk of putting the cart before the horse.

I also add that when I read new clause 1 in detail, I saw that it refers to “advice”. On my reading, that would constrict potential policy responses and force the Government to go down the advice route, rather than provide other services that might be on offer through the advice and guidance boundary review.

The intention is good. I think there is huge consensus on the need to tackle the problem, but the right way to do it is through sophisticated and proper policy making, rather than the blunt instrument of amending primary legislation. For those reasons, I oppose this new clause.

[The Parliamentary Under-Secretary of State for Work and Pensions (Torsten Bell)]

I thank the proposers of these new clauses. I will take them in the way they were intended—to spark debate.

We have had quite a wide debate and I think there is consensus on the subject, but I want to put a slightly different spin on the problem statement we are talking about. We have come at a lot of the discussion on the new clause as if there is too little advice. I would slightly reframe the question when it comes to pensions, which is that there is too much complexity, and too little advice or guidance. I think that is the right way to think about the problem that we are confronting with the system as a whole.

I will broadly outline our approach to try to tackle that problem statement. The task is to reduce the complexity as well as to increase the guidance and the advice that are available. Having watched the pensions debate over the past 15 years, I have observed that we have too often made pensions more complicated, and then said, “If we only had this advice, it would all be fine.” I do not think that is the right answer. That is a mistake about the nature of the system that we are delivering.

Our job is to reduce the complexity, or to reduce the consequences of it being difficult for people to deal with. That is obviously what a lot of the Bill is trying to do. With small pots, the aim is obviously to reduce complexity. That is what the value for money measures are designed to do. Seen through that lens, they are also aimed at reducing the costs of that complexity. The value for money regime is there to reduce the consequences of it being difficult to engage with and members not choosing their own provider.

--- Later in debate ---

[Kirsty Blackman]

I have a brief comment on the direct marketing purposes. An increasing number of people rely on email communication to get updates on their pension, rather than paper updates. I am aware of a significant number of people of younger generations who are not keen on opening letters that come through their door. They may also not be keen on opening emails, but at least they will be able to search for them, because they will not delete them, and will be able to find out what is in them.

I spoke to somebody the other day who was quite surprised at the low percentage of people who had signed up to use the app for the National Employment Savings Trust. Most of the providers and individuals I have spoken to have seen an increase in the number of people who are keen to use apps or communicate only via electronic communication. The point made by the hon. Member for Horsham is incredibly important. We need to ensure that a balance is in place and that people are provided with the correct and actual updates in a way that they want to receive them, but that they are protected from scams.

[David Pinto-Duschinsky]

I do not disagree with the hon. Lady, but does she agree that this might be a tiny bit premature, given that there is currently a consultation going on about making changes to these rules? The objective of the new clause is valuable, but maybe putting it in statute is not the right way to go.

[Kirsty Blackman]

Mr Speaker and previous Speakers have encouraged us as Members not to worry about repetition. Generally, the more we can talk about and highlight issues the better. Part of the point of the new clause is to ensure that the Minister recognises and says from the Front Bench that this is an important issue. Whether or not there is an actual consultation taking place, if we can have that commitment—we will probably ask him for that commitment again and again, given the nature of this place—we would be very happy to receive it.

I agree with the hon. Member for Horsham that the balance is really important. When it comes to guided retirement products, it is key that companies do not worry that the privacy and electronic communications regulations, or any legislation, is going to get in the way of proper communications, but that people are also protected from potential scam communications, and that we are able to crack down on anyone undertaking scams and looking to take significant amounts of money—these are the largest amounts of savings that the vast majority of us will ever have in our lives.