A consultation which opened yesterday to usher in long-awaited ‘pensions dashboards’ for employees has been welcomed by experts – but the government has been urged to move quickly to ensure the new products are operational soon.
The Department for Work and Pensions’ Pensions dashboards: Working together for the consumer consultation, which was trailed in chancellor Philip Hammond’s 2018 budget, stated: “This government is supporting industry to deliver a private pensions revolution. Pensions dashboards will offer people access to their information from multiple pensions at a time of their choosing.
“In the internet age, people expect information at their fingertips. When it comes to crucial information such as pensions, people should have access to accurate and useful information.”
An online pensions platform would enable workers to easily access and manage multiple pensions from different organisations, and increase their engagement with workplace saving. The consultation announcement said pensions dashboards could “build a greater sense of individual control and ownership of pensions, increase engagement, and reconnect individuals with lost pension pots, benefiting the individual and industry.
“Over time, industry-led pension dashboards will transform retirement savings and pensions forever.”
The government said it was prepared to legislate to compel pension schemes to provide data to dashboards and to take steps to feed state pension data into the system. It said 22 million people would be affected by the move.
Minister for pensions and financial inclusion Guy Opperman added the new Single Financial Guidance Body (SFGB) would convene and oversee an industry delivery group to ensure successful implementation. He added an independent chair would likely be appointed and the SFGB would aim to launch services to the public from January 2019.
Steven Cameron, pensions director at Aegon, said progress towards pension dashboards had stalled over the past year: “There’s been a great willingness from the pensions industry and others to make progress, but until now it’s been held up by one too many red lights. [Yesterday’s] announced feasibility study is, however, offering hope.”
In September, the director of policy at Royal London and former minister for pensions, Steve Webb, told People Management: “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.”
He concluded, however, that even if the dashboards were given the green light, there would still be a “slow and bumpy journey ahead.”
Webb said it was good news that plans for the dashboard had finally been published. “With workers potentially starting a different pension every time they start a new job, being able to see all of your pensions in one place will be vital.”
But he added: “To make a dashboard work, it is vital that the government legislates to require all pension schemes and all pension providers to take part, otherwise the dashboard will be like a jigsaw with missing pieces.”
A comprehensive dashboard was likely to take several years to develop and the government needed to move quickly now from consultation mode to delivery mode, he said.
Cameron agreed the unclear timescale was concerning but remained optimistic, adding: “It's positive to have confirmation that state pensions data will be included, albeit with an unknown timescale.”
Webb said: “Several other countries have had dashboards for years and it is time the UK caught up.”