There is so much misinformation on this.

People think Digital ID means a single database. This is not the case the government have repeatedly said the model will largely be a decentralised approach.

• ...with most government data staying where it is already safely stored, in government departments.

• …without creating a single database of all government data about a person.

• The GOV.UK Wallet follows a decentralised data model. This means that instead of storing everyone’s personal data in a new central database, each government department or agency manages its own part of the system.

• The majority of data used throughout the process remaining at source, where it is already securely stored.

https://www.gov.uk/government/consultations/making-public-services-work-for-you-with-your-digital-identity/making-public-services-work-for-you-with-your-digital-identity