Pension Schemes Bill (Eighth sitting)

Debate between David Pinto-Duschinsky and John Grady

Committee stage
Thursday 11th September 2025 Public Bill Committees

[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.