Contribution
My Lords, I shall address each amendment in this group briefly in turn to provide some of the context and rationale for why we have introduced them. First, Amendments 84 and 85 relate to Clause 24. These amendments are concerned with how this policy will operate in practice and whether it does so in a way that is fair, comprehensible and properly accountable. Clause 24 places significant weight on the transfer notice. It is the principal mechanism by which an individual is informed that their pension pot may be transferred automatically if they do not respond. In many cases, silence will result in action, which makes the quality and accessibility of that notice critical.
Amendment 84 therefore seeks to ensure that transfer notices are clear, concise and accessible to all members, including those with low financial literacy or limited digital access. It also requires that notices be available in prescribed alternative formats for members who are digitally excluded, visually impaired or otherwise vulnerable. I took note of the Minister’s remarks about definitions that may need to be properly defined—better defined than I can define them—in legally recognisable terms, and I recognise that.
As we discussed earlier today, we are all aware that pensions communications can be complex and intimidating, even for those who are relatively engaged. We need only to remind ourselves of the challenges experienced in recent years over pension credit communications. I think my noble friends Lady Coffey and Lady Stedman-Scott have had some experience of that. I will leave it at that.
For individuals with small dormant pots, often lower earners, those with fragmented work histories or those disengaged from pensions altogether, the risk is that they simply do not understand what is being proposed or do not realise that inaction has consequences. Often, it is fair to say that pension communications, when received, are by default put in the too-difficult box or the another-day box or in a convenient receptacle placed on the floor—I will leave it at that. The noble Baroness, Lady Altmann, made a similar point in her remarks on an earlier group, but it is a serious point. If the policy depends on member engagement, it is only reasonable that the communication is genuinely capable of being understood. Amendment 84 would simply put that principle in the Bill.
Amendment 85 addresses a different but related concern about oversight and accountability. As drafted, the clause requires transfer notices to be issued, but does not require anyone to monitor how many notices are sent, how members respond or what outcomes are produced. Amendment 85 would place a duty on the Secretary of State through regulations to record and report annually on the number of transfer notices issued and the outcomes arising from them. This matters for two reasons. First, it allows Parliament to assess whether the policy is working as intended. Are members actively choosing options or are transfers overwhelmingly occurring by default? Are certain cohorts disproportionately disengaged? Without data, we simply cannot know. Secondly, it ensures that responsibility for this policy does not rest solely with schemes and regulators but remains subject to ministerial oversight and parliamentary scrutiny, which is particularly important where automatic processes affect individual savers. I hope the Minister will see these amendments as seeking to address important points that will make this part of the Bill work more effectively, and I look forward eventually to hearing her response. I listened very carefully to her remarks on communications and customer service in an earlier group.
Let me now address our Clause 31 stand part notice; noble Lords will be aware that, as set out in its explanatory statement, this is intended as probing. This clause contains a wide enabling provision that allows Ministers, through regulations on small pots, to confer functions; create appeal rights; require extensive data processing; amend primary legislation; and, most notably, authorise the Pensions Regulator to charge prescribed fees in connection with authorisation under the regime. My concern is not that these powers exist at all but that the clause gives us little indication of how they will be constrained in practice. In particular, can the Minister explain how the fee-charging power for the Pensions Regulator will operate? Will fees be strictly limited to cost recovery? How will their level be set? What parliamentary scrutiny will apply?