What a pensions dashboard would mean for employers

As pensions catch up to the smartphone era, Steve Webb explains why employees and ex-employees alike may soon come calling

What a pensions dashboard would mean for employers

Workers in countries such as Australia, Sweden and the Netherlands have access to something that UK workers do not – a website where they can see all of their pension rights in one place. Such websites, generally described as ‘pensions dashboards’, are becoming increasingly common around the world. However, the UK has so far been dragging its heels. There has even been speculation over the summer that the whole idea would be dropped.

So it is welcome that the Department for Work and Pensions has now confirmed that it will be supporting an ‘industry-led’ dashboard. It is hoped that this support involves doing the two things that only the government can do – supplying state pension data to the dashboard and legislating to make all pension schemes and pension providers supply data. Without this, people would see only a very partial and potentially misleading picture of their overall pension situation.

The dashboard is unlikely to come along any time soon. Although the Association of British Insurers has led a consortium which produced a prototype back in 2017, progress since then has stalled. Getting something started which includes modern pensions created through automatic enrolment should not take too long and adding in state pension data which has already been digitised should be feasible in the medium term. But the big challenge – and the big prize – is including data from older schemes, which may have lost touch with their members, including both occupational pensions and personal pensions.

If and when a dashboard comes on stream, there could be a number of implications for employers.

The first is that it is likely to generate a lot of questions. Workers will want to know more about their past and present pensions. Companies may find that they get contacted by ex-employees wanting to know about pensions which have popped up on the dashboard or are perhaps missing for some reason.

Second, current employees will become more aware of their pension situation and some may realise they are not saving enough for retirement. Workers may become more engaged in pensions and may start to save more, perhaps especially into schemes with a meaningful employer contribution.

Third, employers who are responsible for schemes may find that they have to incur increased costs to get the data sorted out and ready to send off in a standard format to the dashboard. Many smaller schemes have data that is in a pretty poor state. It is a good thing that this process could result in data standards being upgraded, but this will clearly come at a cost.

In my view, a pensions dashboard has to come. In an age of smartphones and the internet, it is hard to imagine we will still be relying in a few years’ time on pension schemes sending separate annual statements for separate pensions to the same person through the post. But getting from here to there is likely to be a slow and bumpy journey.

Steve Webb is director of policy at Royal London and was minister for pensions from 2010-15