In the Financial Advice Market Review, there was a recommendation for HM Treasury to “challenge the industry” to produce a pensions dashboard for consumers.
The proposal is to create a consumer-friendly “digital interface”, which will display information about all of an individual’s pension savings in one place.
In pages 47 and 48 of the Financial Advice Market Review final report, it states this data would ideally be retrieved directly from providers and would not require lengthy data input from individuals.
It would update in real time and contain projections of pension income based on different scenarios. The FAMR report recommends having a pensions dashboard in place by 2019.
Liz Coyle, compliance policy manager for SimplyBiz Group, says: “The timescale set by government to design and launch a dashboard by 2019 could be termed ambitious.
“However, it may be possible to achieve this in part by focussing initially on defined contribution funds, rather than all funds including defined benefit schemes, which might struggle to supply ‘live’ data within this timescale.”
The FAMR final report states: “HM Treasury should co-ordinate the government’s involvement in the dashboard, to ensure it provides appropriate legislative and administrative support as the project develops.”
Laurence Baxter, head of policy and research at the Chartered Insurance Institute, says: “The CII supports the idea of a dashboard in principle, because it has the potential to demonstrate to consumers, in fairly straightforward terms, how much retirement savings they have available which should encourage early and informed thinking about their decumulation choices.
“We think the target to have pensions dashboards available by 2019 is a major step forward and boon for consumers.”
Mr Baxter highlights an 18-page report from the CII, published in February, titled What Consumers Want: Pension Freedoms and a ‘New Normal’ in Retirement, in which the CII found 55 per cent of 1005 UK adults surveyed claimed to be quite knowledgeable about all the options.
However when presented by more information during interviews, it was clear consumers had over-estimated their knowledge levels.
Mr Baxter says: “Our research shows consumers need this sort of information in an easily accessible way and in a manner to prompt further questions and engagement with appropriate guidance and advice services.
“The dashboard could be a viable approach to delivering this and engaging consumers.”
According to David Severn, former head of investment policy for the Financial Conduct Authority’s predecessor the Financial Services Authority, “If a dashboard can be developed, it would be a very helpful resource for consumers”.
Yet there are challenges in the provision of such a dashboard. One is the sheer range of pension vehicles that would need to be collated into such a portal.
Nick Eatock, executive chairman of Intelliflo, explains: “The main challenges with the provision of a pension dashboard is the diverse nature of the retirement vehicles used to deliver a targeted retirement income.”