Pension Freedoms have the potential to do something all the previous rules, regulation and legislative changes have never achieved.
This is to get people engaged with their pensions early in the savings journey and not just nearing the point of retirement.
The initiative was long overdue – it is estimated that people spend more time choosing their annual holiday every year than they do on their retirement planning.
There is no doubt the freedoms have raised the profile of pensions. The ability to decide how best to take benefits, and to consider whether to pass pensions down the family generations as well as to other beneficiaries, has delivered a flexibility into the market which has not only turned tax planning on its head but also will require people to make some big decisions about their retirement planning.
Financial advisers attest to an increase in the number of people coming through the door to talk about their pensions – and not just the so-called insistent clients – which is good news for the adviser market.
And, of course, the pensions market is being extended – automatic enrolment has already brought another 6m people into pensions saving and that will increase through the final staging dates this year and into 2017.
In consequence, people need faster and better access to their pension information. Which is where there is the opportunity to raise the profile of pensions even further.
Currently, obtaining a pension valuation – or several pension valuations, as most people are expected to pay into more than one over the length of their careers – is not always a simple or efficient matter, but it needs to be if people are to get to grips with their retirement saving and planning.
Hence the pensions dashboard is seen as fundamental to the overall pensions freedoms movement, as confirmed by George Osborne in his 2016 Budget speech when he verified that the Government was looking to the industry to deliver a pensions dashboard solution by 2019.
Milestone for pensions and advice
This could be a milestone for both the pensions industry and the financial adviser market, facilitated by the development of the pension dashboard.
Imagine that in 2019 every pension-paying member of the public can sit at a computer screen, log on to a dashboard and, having verified their identity, at the click of a button can get access to up-to-date information and valuations of all their pension holdings – DC, DB and State Pension.
Furthermore, in addition to having an overview of their pensions, which will enable them to see exactly what they have built up and what more they need to do to achieve the retirement income they aspire to, the dashboard will help consumers locate lost pots, and make informed decisions on retirement planning.